Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — AGRICULTURE, FISHERIES AND FOOD

North Sea Herring

Mr. McQuarrie: asked the Minister of Agriculture, Fisheries and Food what progress has been made in negotiations between the European Economic Community and Norway on the shareout of the herring stock in the North sea.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. John MacGregor): Negotiations between the Community and Norway on the arrangements for 1985 under the EC-Norway fisheries framework agreement are continuing. While there has been some progress, no agreement has so far been reached on the respective allocations to the Community and to Norway for herring in the North sea.

Mr. McQuarrie: I am grateful to my hon. Friend for that informative reply. Will he assure the House that when the negotiations continue on 11 and 12 December in Oslo he will ensure that, if there is any question of an agreement being reached on herring stocks in particular, he will safeguard the interests of the British fleet in order to ensure that total allowable catches are not reduced?

Mr. MacGregor: I am grateful to my hon. Friend. I can assure him that at the Council meeting on Tuesday this week the Council insisted on maintaining the Commission's firm line on negotiations on Norway's herring demands, which we regard as unreasonable. That was the position that we took. It is better to delay rather than rush negotiations in order to arrive at an acceptable conclusion.

Dr. Godman: While the Minister is dealing with fisheries agreements between the EEC and other maritime nations, will he tell us whether it is true that one of the major remaining stumbling blocks in the current continuing negotiations between Spain and the EEC is a fisheries agreement? What concessions are likely to be made by the EEC to Spain over fisheries, and what concessions will the EEC demand of Spain in the negotiations?

Mr. MacGregor: The hon. Gentleman will have seen that agreement was reached at the Council this week on the negotiating position that the Community should take in relation to fisheries and enlargement. The Community

is taking a firm line to protect British fishery interests. It would obviously be unwise to reveal the entire negotiating position, but I can assure the hon. Gentleman that the decisions reached this week at the summit were satisfactory to us.

Mr. Mark Hughes: Will the Minister accept that it might have been to the convenience of the House if he had answered written question No. 122 today in the name of the hon. Member for Banff and Buchan (Mr. McQuarrie) on the outcome of the meeting of the Council on this question rather than try to hide it away in a written answer?

Mr. MacGregor: I would have much preferred to answer it now, but it is a lengthy answer which will be given later this afternoon. However, I accept the hon. Gentleman's point and wish that it could have been taken into account today.

Milk

Mr. Knox: asked the Minister of Agriculture, Fisheries and Food if he will make a statement about the Government's attitude towards the milk co-responsibility levy.

The Minister of Agriculture, Fisheries and Food (Mr. Michael Jopling): The Government are opposed to the co-responsibility levy, since it has not been effective in controlling the milk surplus.

Mr. Knox: Does my right hon. Friend agree that, whatever the previous justification for the levy might have been, the introduction of milk quotas and the super levy have rendered it completely unnecessary? Does he hold out much prospect of getting rid of it in the near future?

Mr. Jopling: I hope that when we reach the next price fixing in the early months of next year we shall be able to obtain a cut in the levy in the context of a tough prices policy.

Mr. Nicholson: Is the Minister aware that farmers in Northern Ireland will pay almost £7 million this year in co-responsibility levy on top of £5 millon in dairy quota levy? Will the Minister assure the House that he will add his weight to the abolition of the co-responsibility levy, as it is now unnecessary after the introduction of dairy quotas?

Mr. Jopling: I am intrigued to hear the hon. Gentleman's comment about the level of dairy quota levy that might be payable in Northern Ireland for this year, because he is making assumptions about the amount of milk likely to be produced between now and the end of March. As I said, we are opposed to the co-responsibility levy and will seek a cut.

Mr. Maxwell-Hyslop: Which, if any, members of the EEC favour the retention of the levy following the introduction of quotas instead of financial measures?

Mr. Jopling: I regret to say that some EEC member states are in favour of the co-responsibility levy in varying degrees. If none had been, it would have been easier to get rid of the thing.

Mr. Torney: As the dairy quota scheme seems to have overtaken the co-responsibility levy, is the right hon. Gentleman satisfied that the scheme is being operated adequately by other member countries, particularly France, in the way that Britain is honouring it?

Mr. Jopling: I have no grounds for supposing that the co-responsibility levy is being improperly or illegally implemented in any member state. If the hon. Gentleman has any evidence of that, I hope that he will send it to me with the greatest possible urgency.

Mr. Harris: Instead of hoping for a cut, will my right hon. Friend go further and press for the complete abolition of this discredited levy?

Mr. Jopling: The problem that we must face is that if we were simply to scrap the levy without at the same time operating a firm prices policy we could create possibilities of there being incentives at some future time to increase milk production in the event of the quota scheme being abandoned. I still hope that at the end of the five-year period we shall be able to abandon the quota scheme and return to a market that is managed, as it should be, by the discipline of price.

Aujeszky's Disease

Mr. Freud: asked the Minister of Agriculture, Fisheries and Food what representations he has received concerning the evaluation and administration of claims by his Department as a result of Aujeszky's disease; and if he will make a statement.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Peggy Fenner): A number of representations have been made about the Aujuezky's disease control and eradication programme, in particular in relation to the cost of the scheme and the Ministry's handling of the salvage operation. My right hon. Friend the Minister answered questions on these points at a recent meeting of the Select Committee on Agriculture, making it clear that he did not accept these criticisms.

Mr. Freud: Will the Parliamentary Under-Secretary reconsider her decision not to give further assistance to the eradication scheme? Will she accept that pig farmers are the most ill-fated of the members of the National Farmers Union, and will she do something to help them?

Mrs. Fenner: No, Sir. The industry opted for the scheme after a second poll and did so on the basis of the industry paying for the scheme. The second poll enforced that.

Mr. Home Robertson: Will the Parliamentary Under-Secretary stop trying to get round the fact that the scheme has already cost more than twice as much as the Department originally estimated and is now adrift by about £15 million? Do the Government want to eradicate Aujeszky's disease? If so, why will the Minister not accept responsibility to underwrite a fair proportion of the cost?

Mrs. Fenner: I welcome the hon. Member for East Lothian (Mr. Home Robertson) to the Dispatch Box. Estimates at the inception of disease control programmes are necessarily speculative. The producer poll form—the original document—emphasised the difficulties of estimating and stated that the net cost might be at least £6 million, excluding consequential loss payments of £3·5 million, paid against Ministry advice, and interest payments.

Mr. McQuarrie: Does my hon. Friend accept that the cost was £27 million and that at the present moment the

actual debt due on Aujeszky's disease eradication is £15·4 million? Should not the Minister consider that and not penalise the producers?

Mrs. Fenner: As I have just said, at the second poll the producers asked for matters to be arranged in this way and they did so on the basis that the pig disease eradication fund would pay.

"The Way Forward"

Mr. Baldry: asked the Minister of Agriculture, Fisheries and Food what is the Government's response to the National Farmers Union's policy paper, "The Way Forward."

Mr. Jopling: This is in general a helpful statement of the National Farmers Union's views on the directions which future agricultural policy should take. I look forward to reading the more detailed paper which the NFU is now producing.

Mr. Baldry: Does not that policy paper show that the NFU is anxious to contribute to a policy of responsible use of resources on the land, but that it is confused about what the rest of society wants from it? As agriculture has been successful for many years and has produced ever more food, the NFU now regards the problem of surpluses as one on which society says that it does not want so much food. In addition to a more detailed paper from the NFU, would there not be some merit in the Government producing a White Paper on what we want farmers to produce and future agricultural policy?

Mr. Jopling: The Government have worked extremely hard on these lines for several months. As part of our thoughts on these matters we are interested to have the views of the NFU and other similar bodies. We must get the general guidelines that we think it right to give clear in our minds before thinking about what method might be used to put out those views.

Mr. Ron Davis: Is the Minister not somewhat embarrassed by the fact that the NFU is now proving to be more radical in terms of agricultural policy than the Government? Is he aware that the report calls for a better relationship and a different approach to agriculture so that environmental objectives can be properly taken into account? Does the right hon. Gentleman have any firm objectives to meet in response to the NFU's paper?

Mr. Jopling: I welcome the NFU's views on conservation matters. Farmers and others have welcomed initiatives that my Ministry has taken. Perhaps I could draw the hon. Gentleman's attention to our initiative in Brussels to introduce conservation matters to the new structures directive, which we shall discuss again in Brussels on Monday and Tuesday.

Mr. Cockeram: Does my right hon. Friend agree that, now that the NFU accepts that there is a need to restrain the production of agricultural surpluses, that represents a unique opportunity for the partnership between the Government and agriculture to plan the future? Will my right hon. Friend take an initiative in that respect?

Mr. Jopling: We are all glad that the NFU has been sufficiently responsible to recognise that it is not possible to continue having an agricultural policy which is based on increasing production almost at any price. We must


consider together how to cope with surpluses. The problems of structural surpluses generally arise from support price levels. I hope that we can get an agreement that action on prices is the right response to the problem.

Mr. Skinner: Will the Minister tell the NFU that the Think Tank report of November 1983 forecast that subsidies for British farming in 1984–85 would be £1,000 million and that that, added to CAP assistance, would be equivalent to a subsidy of £20,000 per farmer? As farmers do not pay rates, will the right hon. Gentleman have a word with the Prime Minister after he has met the NFU and ask how the Government can manage to subsidise farmers to that extent when somehow or other they cannot manage to look after pits and miners? We are not after £20,000 per miner—we will settle for less than that.

Mr. Jopling: I do not want to make any remarks about the current miners' dispute. If every group in Britain had made the contribution to the British economy that agriculture has made since the war, Britain would be a great deal better off.

Diet and Disease (Report)

Sir Peter Mills: asked the Minister of Agriculture, Fisheries and Food if he has come to any decisions about the report of the Committee on the Medical Aspects of Food Policy on Diet and Disease.

Mrs. Fenner: Our officials are examining those recommendations of the report which fall within our responsibility, and are discussing their implications with interested parties. We hope to be able to make an announcement of our response to the report within the next three months.

Sir Peter Mills: Will my hon. Friend bear in mind that a greater threat to the dairy industry than milk quotas is the health lobby? The continually declining level of consumption of milk products must be taken seriously by the Government. Will she also bear in mind that doctors and others have phases and fads? A few years ago we were told not to eat bread and potatoes, but now we have to eat them for roughage purposes, and some of us are chewing the cud in the evenings.

Mrs. Fenner: The report recognises that the evidence is short of proof, but the recommendations are based on a careful review of all the available evidence, and the report represents the best scientific and medical advice that is available to the Government. The nation's health is of vital importance. Changes in diet resulting from that report will not take place overnight. They will result from consumer choice. The trend to healthy diet has already begun and is not an attack on a particular sector. I assure my hon. Friend that consumers are free to choose their own healthy diet.

Mr. Cohen: Is the Minister not ashamed of the United Kingdom's conspicuous placing in the world's coronary league? The separate countries of the United Kingdom—[HON. MEMBERS: "Reading."]—are in three of the top five places for males — [HON. MEMBERS: "Reading."]—I am going to say it anyway. And in two — [HON. MEMBERS: "Reading."] of the top five for females, for cardiovascular disease.

Mr. Speaker: Order.

Mrs. Fenner: rose—

Mr. Cohen: I have not finished yet, Mr. Speaker.

Mr. Speaker: Order. The hon. Gentleman may have a quick look at his question, but he should not read it.

Mr. Cohen: I am going to have my say, because this is an important matter.
Does, the Minister share the concern of the medical profession for Government action to improve food quality? [HON. MEMBERS: "Reading."] Why do the Government not take preventive measures such as those that have been adopted in the United States, Canada, Australia and Scandinavian countries, which have had an impact on heart disease, or has she completely sold out to the vested interests in the big food corporations?

Mrs. Fenner: Of course the Government are concerned, and that is why COMA produced this considerable report, which we are studying. We are also looking at the ways in which we can implement those recommendations that require action by my Department.

Mr. Meadowcroft: I welcome the tinge of encouragement in the Minister's reply, but does she accept that not enough is done towards the prevention of disease rather than trying to cure it? Will she use her influence on her right hon. Friend the Secretary of State for Social Services and bring to bear whatever powers she can to make him realise the crucial need for prevention?

Mrs. Fenner: The import of the report was to encourage prevention. I do not accept the hon. Gentleman's criticism. At the moment we are looking at the practicalities of the problems of labelling food with a fat content. We are having discussions with consumers and enforcement authorities on the best way to do this. We are commissioning a study of consumer attitudes and understandings of labelling, because if we are to label we want to be sure that the labels are intelligible. We are discussing with the drink trade alcoholic strength labelling, and we are discussing with industry how it can introduce ways to produce food with less fat and less salt. I am sorry to answer at some length, but the hon. Member for Leeds, West (Mr. Meadowcroft) questioned the action that we are taking, so I have told him about it.

Eggs, Poultry and Pigmeat

Mr. Hunter: asked the Minister of Agriculture, Fisheries and Food if, following recent reductions in cereal prices, there has been an increase in the United Kingdom's production of eggs, poultry and pigmeat.

Mr. MacGregor: It is too early for the recent fall in cereal prices to have been reflected in the production levels of intensive livestock.

Mr. Hunter: Bearing in mind the cyclical nature of the intensive livestock sector, does my hon. Friend believe that reduced cereal prices will have a long-term benefit for that sector, especially as regards its competitiveness in the Common Market?

Mr. MacGregor: I agree that it will have a considerable beneficial effect. In the many discussions that I have with the industry, especially the pig industry, we are agreed that one of the main ways in which it can be benefited is through lower feeding stuff prices. That is one of the areas where the Government can help most


while maintaining our efforts in the Community to get longer-term restraint on cereal prices. That helps both with margins for producers and in making sure that the products are competitive. But I agree with the Select Committee, which pointed out that the problem of cyclical instability will not be resolved by adjustments to prices of feeding stuffs alone and therefore that it is necessary to continue to have action within the industry on marketing, processing and matching output to demand.

Mr. Home Robertson: In reviewing the prices and the production of these commodities, will the Minister assure the House that he will not favour the closure of uneconomic farms or the obliteration of agricultural communities? Will he also commend that enlightened policy so that it can be adopted by another member of the Administration in another strategic and vital primary industry?

Mr. MacGregor: It is essential to get the support pricing policy right in the Community, in order to avoid excessive costs to the taxpayer. Within that there are always structural adjustments in agriculture. That has been taking place over many years, and I believe that it will continue to do so.

Mr. Jackson: With regard to the future course of cereal prices, it seems clear that the guarantee thresholds agreed this year will have been triggered by the output. The rumour is that it may require a reduction in target prices of about 5 per cent. at the next price fixing. Is it my hon. Friend's intention to insist that those guarantee thresholds are honoured in full?

Mr. MacGregor: We have not yet seen the new Commission's proposals, but I can assure my hon. Friend that it is the Government's view that cereals are best dealt with by a clear policy of long-term price restraint. Within that my hon. Friend is right to say that guarantee thresholds will bite next year, and we shall expect them to do so.

Mr. Beggs: Is the Minister aware that grain prices continue to rise in that part of the United Kingdom that I represent? Does he also recognise that if it continues it will lead to a further decrease in the production of eggs and pig and poultrymeat and possibly to further job losses? Will the Minister consider again releasing some intervention grain to Northern Ireland?

Mr. MacGregor: We have to follow Community rules on the release of intervention grain, but I take note of what the hon. Gentleman said, and I shall consider it.

Dairy Industry

Mr. Geraint Howells: asked the Minister of Agriculture, Fisheries and Food if he is satisfied with the present state of the dairy industry; and if he will make a statement.

Mr. Jopling: The dairy industry is showing that it has the enterprise and will to cope with the quota system constructively. When we have achieved a better balance in the market, the industry will be on a more sound and stable basis for the future.

Mr. Howells: Will the right hon. Gentleman assure British dairy farmers that he will abolish the basic co-responsibility levy in 1985. Can he give the House the

latest information about which countries in the Community are collecting the super levy, and what is the position in Britain?

Mr. Jopling: I answered the hon. Gentleman's first question earlier. I hope that in 1985 we can get a cut in the levy in the context of a tough price policy.
The hon. Gentleman also asked which countries were currently collecting the super levy. As far as I am aware, the only country which has collected it up to now—and no payments become due until 14 December—is West Germany. We shall be discussing these matters at the Agriculture Council in Brussels on Monday and Tuesday.

Sir Michael Shaw: Is my right hon. Friend aware of the great desire in the industry that the uncertainty over future quota levels should be resolved as soon as possible so that some stability can be returned to the industry?

Mr. Jopling: I am aware that problems still exist because some producers do not know the final level of their quota. It is to quicken this process that we have agreed to treble the size of the tribunal from 30 to 90 members.

Mr. Kennedy: Is the Secretary of State satisfied with the effect that the outgoers scheme is having on the price of stock within the industry? As the Treasury appears to be in a concessionary mood this week, will he take steps to try to persuade it to relieve dairy farmers in the scheme of the capital gains tax imposition, which falls so heavily on the first payment?

Mr. Jopling: I invite the hon. Gentleman to compare the price of dairy cows for the current period with that of a year ago. He will find that, whereas a few months back prices were running somewhat below last year's, the gap has closed considerably and the difference in price is now very small.

Mr. Colin Shepherd: Does my right hon. Friend agree that one of the unnecessary stresses within the industry is caused by the lack of flexibility between the wholesale quota and the direct sales quota? Can he sustain pressure on his colleagues within the Council of Ministers to achieve this very necessary flexibility?

Mr. Jopling: My hon. Friend is right to highlight this lack of flexibility as perhaps the greatest single difficulty in implementing the scheme. I have been drawing the attention of the Council of Ministers to the problem of inflexibility between direct and wholesale quotas ever since the summer. I shall raise the issue again when I go to the Council next week.

Mr. John: Does the Minister accept that the fact that we are not likely to achieve the quota in the United Kingdom this year speaks volumes about the haste and the lack of forethought preceding the introduction of the milk quota scheme? Will he direct his mind to two further questions, one of which follows previous supplementary questions? When does he think that the uncertainties over quotas and appeals will be ended for the dairy industry? Secondly, as dairy workers are losing jobs because of their efficiency, and not inefficiency, should not the Government be turning their mind to proper redundancy terms so that these workers can be helped at a difficult time?

Mr. Jopling: I begin by welcoming the hon. Gentleman to his new duties. I hope that he will enjoy his


wide-ranging and highly complicated brief. I am sure that we shall have a good many tough debates between ourselves.
It is a fact that we have, so far, cut our milk production below the level of our quota for the period that we are discussing. I reject the suggestion that there was a lack of foresight. The answer lies in the considerable drought in the summer. Some of my colleagues in the Council of Ministers have approached me and expressed some envy in that they did not have the same drought, which reduced milk production.
When do I expect all farmers to have received the final levels of their quota? I am not able to answer that question. The tribunal—as I have said, it has been enlarged—has a great many appeals and exceptional hardship cases before it. However, it is too early to estimate when farmers will know their quotas. We are moving as quickly as we can.
The hon. Gentleman asked about compensation payments for dairy workers who are unfortunate enough to lose their jobs because of the reduced number of dairies. I draw his attention to answers that have been given on many occasions. These answers refer to the statutory scheme for redundancies and the special arrangements that are made by many of the dairies.

Farm Wardens

Mr. Conway: asked the Minister of Agriculture, Fisheries and Food how many hours of training his Department's farm wardens will require to enable them to carry out their responsibilities effectively.

Mrs. Fenner: Farm wardens would be appointed from people with a good knowledge of farms and farmers in their area. Their job would be to provide a link between these farmers and the Department's wartime organisation. Their training would be simple and I am confident that appointment and training could be completed within a few days.

Mr. Conway: I am grateful to my hon. Friend for that reply. How many individuals are involved in the scheme and what will be the total time needed for implementation?

Mrs. Fenner: We believe that we shall require about 6,000 farm wardens for the United Kingdom as a whole. That is about one warden for each 20 farms. We do not think that it will take long to get them together, and the areas are being delineated roughly on that basis.

Mr. Corbett: What arrangements, if any, has the Minister made to ensure that the 6,000 wardens will be spared in the event of a nuclear attack? What plans does the Ministry have to update the ludicrous advice that it gave to farmers a few years ago to protect their dairy herds from the effects of a nuclear attack by spreading tarpaulins over the top of the lanes?

Mrs. Fenner: The Government's duty is to make plans to defend the people. Of course we cannot guarantee that all will live. I am answering a specific question later about the hon. Gentleman's second supplementary question.

Milk

Mr. Marlow: asked the Minister of Agriculture, Fisheries and Food if he will make a statement on the

source and level of the financial resources to he made available to meet the commitments arising from the delay in the collection of the milk levy.

Mr. Jopling: Receipts from the milk supplementary levy are credited to the guarantee section of the European agricultural guidance and guarantee fund. They represent, however, only a very small proportion of total expenditure. The decision to defer into 1985 half of the levy payment originally due this year will therefore only marginally reduce the funds available to offset guarantee expenditure in 1984, the net provision for which is fixed in the Community budget at 18,376 ecu. The actual level of expenditure requirements to the end of the year cannot, however, be predicted with any accuracy at this stage.

Mr. Marlow: As Minister responsible for food and a jealous guardian of the public purse, is my right hon. Friend not concerned about the level of public financial resources expended on agriculture support at a time when other Government programmes are being severely cut?

Mr. Jopling: My hon. Friend refers to delays in collection. The amount of levy postponed to 1985 represents only about one day's expenditure, and therefore the effect is not likely to be significant.

Mr. Deakins: Does not the Council of Agriculture Ministers' approach to the milk levy illustrate once more its complete lack of financial responsibility when dealing with Community funds? Is that not one reason why the Council was not asked to approve the financial guidelines on budgetary discipline, which, presumably, it regards as not being worth the paper they are printed on?

Mr. Jopling: I am sure that the recent agreement on budgetary discipline will be helpful in containing the burgeoning rate of agriculture expenditure, which has got us into so many difficulties related to surpluses and overspending in recent years.

Mr. Home Robertson: Was not the Minister's gesture of refusing to pay the milk levy rather futile, since Great Britain is likely to fall 400 million litres short of the present year's quota? Do we not need an urgent review of this shambles to ensure that the British dairy industry meets it production quota?

Mr. Jopling: The hon. Gentleman appears to have forgotten that Northern Ireland dairy farmers exceeded their quota for the first six-month period. The hon. Gentleman referred to Great Britain, but he should remember that it looks as though we are due for payment of some levy in Northern Ireland for the first six months. I have said time and time again in the Council that it would be intolerable if farmers in one part of the Community were asked to pay the levy while those in other parts of the Community were making no effort to stick to the rules.

Mr. Nicholson: During the Minister's recent and welcome visit to Northern Ireland, did he develop any greater understanding of the problems facing Northern Ireland dairy farmers? Will the right hon. Gentleman now accept that Northern Ireland dairy farmers did not receive the 65,000 tonnes and that that is causing great hardship to the Northern Ireland dairy industry?

Mr. Jopling: I enormously enjoyed my visit to Northern Ireland. I was glad to have the opportunity to


clear up misapprehensions that Northern Ireland had not had the benefit of the 65,000 tonnes which I was able to negotiate on its behalf.

Rev. Ian Paisley: Will the right hon. Gentleman take it from me that, instead of clearing it up, he enlarged the problem facing the dairy industry? Does the right hon. Gentleman now understand, after his visit, that it is the Northern Ireland dairy farmers who, alone in the United Kingdom, will have to pay this iniquitous levy? Will the right hon. Gentleman give a guarantee to those dairy farmers that the statement made by the Prime Minister from the Dispatch Box will be adhered to and that no money will be collected until every Community partner collects the same money from its dairy farmers?

Mr. Jopling: My great disappointment when I visited Northern Ireland was that the hon. Gentleman was not able to meet me to discuss these matters. With regard to the words used on 20 November by my right hon. Friend the Prime Minister about the payment of levies, all I can say is that I could not have said it better myself.

Rev. Ian Paisley: On a point of order, Mr. Speaker.

Mr. Speaker: Order. I shall hear points of order after questions.

Later—

Rev. Ian Paisley: On a point of order, Mr. Speaker. You will recall that when the Minister of Agriculture, Fisheries and Food was answering today he implied in his reply to me that I deliberately did not meet him when he was in Northern Ireland. Is it right for the right hon. Gentleman to mislead the House? When he invited representatives of farming communities to meet him at a dinner—in Stormont I think it was—he deliberately left out the hon. Member for Newry and Armagh (Mr. Nicholson) and myself. If he wants to meet us, why did he do that?

Mr. Speaker: Order. I am responsible for what goes on in the Chamber. I cannot be responsible for who is invited to dinner parties.

Mr. Andy Stewart: asked the Minister of Agriculture, Fisheries and Food whether he has discussed with the European Commission the possibility of leasing milk quota.

Mr. Jopling: Leasing quota separately from the land is one of several possible methods of improving the quota system that I wish to discuss thoroughly with the industry and the professional bodies in the United Kingdom before approaching the European Commission.

Mr. Stewart: Does my right hon. Friend agree that, because of the urgency of this matter, we should decide, before it is too late, that this country should not go it alone?

Mr. Jopling: The truth is that it is perfectly clear that leasing a quota would, if permitted under the regulations, allow a producer with a temporary excess quota to let his quota to another producer for a fixed term, at the end of which the quota would return to the original holder. There is an advantage in that approach, because it would make the quota system more flexible and would help to ensure that the available quota was fully utilised. At the moment that is against the rules, and there is no way that we can operate against the rules.

Mr. Ashdown: The Minister will know that there is widespread concern and anger in farming circles about the apparently unjust discrepancies between the decisions taken by the various panels. Will the right hon. Gentleman undertake to assist farmers to assess the nature of this problem by publishing the amounts of secondary quota allocated by each of the various local panels?

Mr. Jopling: We set up the tribunal because we foresaw that there might be some discrepancies between the panels. In the event of dissatisfaction, appeals can be made for a second look at those decisions by the tribunal.

Grain (Intervention Storage)

Mr. Bellingham: asked the Minister of Agriculture, Fisheries and Food what is the total tonnage of United Kingdom grain that has gone into intervention storage in the current year.

Mr. MacGregor: A total of 2·16 million tonnes of grain have been delivered into United Kingdom intervention stores in the current marketing year to 1 December.

Mr. Bellingham: Is it true that, if the Government want to send grain to Ethiopia, it is cheaper for them to buy it on the open market than to take it from our intervention stores and from our farmers who have been paid for the grain? Many of my constituents, especially those who contributed to the Ethiopian famine appeal, find that absurd and offensive. Will the hon. Gentleman talk to his European colleagues with a view to reforming the system?

Mr. MacGregor: There are two main points to be made. We are sending—and have been doing so all through the year—considerable quantities of cereals out of intervention stores to Africa to deal with famine. My hon. Friend will know that at the European summit earlier this week a commitment was made to send 1·2 million tonnes next year. While we have those stores in intervention it is right to use some of it for that purpose, but it is a good deal more expensive to give it as food aid than to keep it in intervention stores. That point has also to be taken into account.
In our overall aid programme we concentrate a considerable amount of the food aid on developing agriculture and on making use of agricultural stocks that are available and cheaper elsewhere in the world. The problem with regard to Community stocks is that, with high support prices for cereals, they are expensive to dispose of.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Duffy: asked the Prime Minister if she will list her official engagements for 6 December.

The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today.

Mr. Duffy: As the Prime Minister ponders the implications of yesterday's shabby U-turn in favour of the


better-off, has it not occurred to her that any future indication by her of the Tory spirit of one nation must serve only to highlight her own entrenched position on unemployment? "There is no alternative", as she puts it. [Interruption.] Does she not see that the danger ahead, as her rebellious Back Benchers become increasingly rattled, is that having turned her Secretary of State for Education and Science and her Chancellor of the Exchequer this week, they may ponder whether the lady herself may be for turning?

The Prime Minister: The hon. Gentleman clearly worked very hard at that question, although I think he lost his way a good deal long before he came to a conclusion. I thought that yesterday's statement was received rather well. [Interruption.] I think it was well received rather widely. There is an increase in the science budget, and it is far above what it was in 1978–79.

Sir Kenneth Lewis: Does my right hon. Friend agree that, contrary to what has just been said, and contrary to what was said in the press this morning, the decision yesterday on student grants enhanced the reputation of her right hon. Friend the Secretary of State for Education and Science? [Interruption.] It enhanced the reputation of this House. Will my right hon. Friend have a word with some of her other right hon. Friends and ask them to be equally forthcoming and flexible on other things in the coming year?

The Prime Minister: I thank my hon. Friend for the first part of his question. With regard to the second part, no, I shall not urge the Chancellor of the Exchequer to allow more public expenditure. I remind my hon. Friend and other hon. Friends that there is a great need to lift taxation at the threshold to help those who are on comparatively low wages, and to increase the gap between those on social security and those on earnings.

Mr. Kinnock: Is it not the fact that, in the course of making a desirable concession yesterday, the Government robbed science in order to save their own skin, regardless of the damage thereby inflicted on British engineering, medicine, industry and technology? The Secretary of State for Education and Science said last week that
the desparate plight of the scientists could not wait longer.
How is it that they can wait longer this week?

The Prime Minister: The science budget for the coming year is greater than the science budget for this year. Under the stewardship of my right hon. Friend the Secretary of State for Education and Science, the science budget for 1984–85 is £530 million, compared with £274 million in the last year of the Labour Government. The right hon. Gentleman must have been very angry with his colleagues on that occasion.

Mr. Kinnock: The right hon. Lady is misleading the House and the country. She should know that if one compares like with like the annual rate of growth in investment in science under the Labour Government was four times as high as it has been under the Tories. Does she admit that for four years the Government have been cutting research expenditure? Is she aware that only last week the Advisory Board for the Research Councils reported that worse was to come because the decrease in investment in science would continue as a result of Government policies? When will the right hon. Lady give up her obsession with cuts, and wasting national assets, and act in the national interest?

The Prime Minister: The right hon. Gentleman talks about an obsession with cuts, but the biggest cuts in public expenditure in the past 10 years were made by the Labour Government between 1976 and 1977. Those cuts were bigger than anything ever known. Taking everything at 1982–83 prices, the Labour Government cut public expenditure by £9 billion in one year. I congratulate the right hon. Gentleman on the fact that his party cut public expenditure by a far greater amount than ever before.

Mr. Kinnock: rose—

The Prime Minister: One moment—I have not yet answered the first part of the right hon. Gentleman's question. He is too anxious. After that £9 billion cut, the best that the Labour Government could do for the science budget in 1978 was £274 million. It has now gone up, by far more than inflation, to £530 million. The right hon. Gentleman should be congratulating my right hon. Friend the Secretary of State.

Mr. Kinnock: I should very much like to be able to do that, but I should have to congratulate him, again, on misleading the House. Does the Prime Minister admit that, whereas in 1979, under the Labour Government, all the alpha projects were paid for, only half of them are paid for now? If she is so proud of the Government's record, will she undertake that there will be no further cuts in the research budget in the future?

The Prime Minister: The right hon. Gentleman is no person to say that there should never be Government cuts, when his party holds the record for cuts in public spending. They were very hard cuts—cuts in the real value of the Health Service, and real cuts in aid. My right hon Friend the Secretary of State for Education and Science has done excellent things for science, as I have shown. If the right hon. Gentleman's argument is true, perhaps I may point out to him that there are far more alpha projects now as a result of what the Government have done for science.

Mr. Hordern: I applaud the action of my right hon. Friend the Secretary of State for Education and Science yesterday, but would it not be a good idea to undertake a long-term review of public expenditure as a whole, across Departments, and to bring that forward along with a review of revenue at the beginning of the year so that the fullest consultation with the House can take place? Is my right hon. Friend aware that, so far, the autumn reviews of my right hon. Friend the Chancellor have been far too much like Russian roulette, with the pistol pointing at our feet, and that it is time the system was changed?

The Prime Minister: As my hon. Friend knows, there are always difficult choices to be made in public expenditure, but it cannot simply go on and on rising. We saw the effect of that in the mid-1970s, when we finished up at the IMF, with the biggest single public expenditure cut ever known, and the biggest borrowing, which we are still repaying. We have to take steps to contain public expenditure, and all other Governments have to do the same. There are difficult choices to be made. Naturally, I am anxious to let my right hon. and hon. Friends have as much information as possible. We can learn a great deal by looking back, but there is no way of getting out of difficult choices. If we are to help people on low wages to have bigger net take-home pay, we have to find a way to cut taxation.

Mr. Fisher: asked the Prime Minister if she will list her official engagements for Thursday 6 December.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Fisher: Has the Prime Minister read the article in January's edition of Accountancy about the National Coal Board's accounts? It is written by five independent academics, who conclude that the NCB's accounts do not, in their view, form
an adequate basis for informed management decisions".
Is she aware of their view that the "Accounting Statement for Pits", known as F23, is a totally flawed instrument with which to make pit closures because of its policy towards depreciation, stocks and surface damage? Will she tell the House whether F23 is the accounting basis for pit closures? If it is not, what is the accounting basis? Will she make a full and detailed statement to the House on this issue, which is central to the entire dispute?

The Prime Minister: If the hon. Gentleman regards the matter of coal merely as one of accounting—[HON. MEMBERS: "Oh!"]—and thinks that it can all be done with mirrors, he will be happy if we eliminate the £1·3 billion a year subsidy to the National Coal Board. That is not a matter of accounting, but a matter of fact —[Interruption.] It is plain that that is a matter of fact. [Interruption.] I am talking about the £1·3 billion of taxpayers' money. Regarding the accounts at Cortonwood [Interruption.]—

Mr. Speaker: Order. The behaviour of the House is most unseemly. The hon. Member asked a detailed question and the Prime Minister is replying to it.

The Prime Minister: The National Coal Board believes that the calculations of the academic accountants are misleading, especially because their calculations were based on 1981–82 results, when Cortonwood lost £6·2 a tonne. In 1983–84 it lost £32 a tonne. If it is only a matter of accounting, we could cut the £1·3 billion subsidy and be much better off.

Mr. Philip Oppenheim: Is my right hon. Friend aware that Derbyshire county council is planning to spend £1·3 million on a party political propaganda campaign? Is she further aware that the Scargillite leader of the council describes such spending as a mere pinprick? Is this not typical of the sheer contempt with which Socialists treat public money?

The Prime Minister: Yes. As my hon. Friend says, there is no such thing as public money. Money comes from taxpayers and ratepayers, and it could be spent on their own families if it were not taken for other purposes.

Dr. Owen: As someone who was for four years Secretary of State for Education and Science, who is a scientist and an honorary fellow of the Royal Society, does

the Prime Minister not feel that it was niggardly to withdraw the money that science desperately needs, and merely spoil the statement yesterday and the ship for a ha'porth of tar?

The Prime Minister: No, Sir. The right hon. Gentleman knows that Governments must make difficult choices. He is in the comfortable position of being in opposition, when he refuses to make those choices. He had to make them in government. Indeed, he was a member of the Government who made the £9 billion cuts in one year after years of profligacy.

Ms. Clare Short: asked the Prime Minister if she will list her official engagements for Thursday 6 December.

The Prime Minister: I refer the hon. Lady to the reply that I gave some moments ago.

Ms. Short: Is the Prime Minister aware that a vast and growing number of people are deeply worried at the division, bitterness and economic decline that her Government have brought to the country? Before irreparable harm is done, will she make some concessions so that we can settle the coal strike, and will she shift her economic policy so that we can begin to deal with unemployment?

The Prime Minister: No, Mr. Speaker. The National Coal Board has negotiated and made concessions. None have been forthcoming on the other side. The National Coal Board can move no further.

Mr. Skinner: On a point of order, Mr. Speaker.

Mr. Wood: I am sure that my right hon. Friend is aware that the Conservative Benches welcome the flexibility demonstrated by the Government yesterday. May I draw my right hon. Friend's attention to the fact that a stable economy is the best way in which industry and technology in industry can be developed over the coming years?

The Prime Minister: Yes, Mr. Speaker. I am aware of my hon. Friend's interest that we should do everything that we can to assist enterprise and those who work in industry. That includes raising taxation thresholds so that there is an increasing gap between low incomes and social security benefits.

Mr. Dalyell: On a point of order, Mr. Speaker. May I ask whether you have had any request from the Prime Minister to answer substantive question No. 4.

Mr. Speaker: Order. Unfortunately, we did not reach Question No. 4 largely because the supplementary questions today were of such great length.

Points of Order

Mr. Dennis Skinner: On a point of order, Mr. Speaker. You will recall that yesterday I raised a matter with you about tabling a question to the Chancellor of the Exchequer in respect of the money that will be coined by the Government from the sale of the record produced by Band Aid to assist the Ethiopian victims. You will recall that I pointed out that the Government should ensure that every single penny of value added tax raised on that record should go to Ethiopia. I submitted a question to the Table Office in accordance with your instructions yesterday. I have not yet seen it tabled. I am told that it has gone to you so that you can adjudicate upon the matter. It is important, when young people get together, free of charge, to provide a record and money, that the Government should ensure that they do not make a profit out of it.

Mr. Speaker: Order. The hon. Gentleman is seeking to put a supplementary to a question that I have not yet seen. I was pleased to hear the record played to me just before lunch.

Sir John Wells: Agricultural questions, both today and generally, run for some 40 minutes. One third of the food that you, Mr. Speaker, eat and that we all eat, is of horticultural origin. The only question today that had horticultural implications was question No. 5. I know that my hon. Friend the Member for Medway (Mrs. Fenner) replied at very great length. I know also that the hon. Member for Leyton (Mr. Cohen) read his question at very great length. Despite these two long interventions, is it not unfortunate that you did not see fit to call some hon. Members to raise horticultural questions?

Mr. Speaker: Order. If the hon. Member looks at the Order Paper he will see that nearly all the questions up to question No. 18 came from his side of the House. I have an obligation to balance the interests of both sides of the House. I am very sorry that I was unable to call the hon. Member on that particular question.

Business of the House

Mr. Neil Kinnock: May I ask the Leader of the House whether he will state the business of the House for next week?

The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): Yes, Sir. The business for next week will be as follows:
MONDAY 10 DECEMBER — Second Reading of the Representation of the People Bill.
Motion on the Local Government (Interim Provisions) Act 1984 (Appointed Day) Order.
TUESDAY 11 DECEMBER — A debate on European Community documents on the draft general budget for 1985, when the White Paper on developments in the European Community January to June, 1984, Cmnd. 9348, will be relevant.
The document numbers will appear in the Official Report.
Motions on the International Development Association (Seventh Replenishment) Order and on the International Bank for Reconstruction and Development (1984 Selective Capital Increase) Order.
WEDNESDAY 12 DECEMBER AND THURSDAY 13 DECEMBER — Progress in Committee on the Local Government Bill.
FRIDAY 14 DECEMBER—Private Members' Motions.
MONDAY 17 DECEMBER—Until Seven o'clock, Private Members' Motions.
Afterwards, motions on the Merchant Shipping (Liner Conference) Orders.
Motion on the Appropriation (No. 3) (Northern Ireland) Order.
The House will wish to know that it will be proposed that the House should rise for the Christmas Adjournment on Friday 21 December, until Wednesday 9 January 1985.

The following documents are relevant to the debate on 11 December:


1984 Supplementary Budget


(a) 8322/84
Preliminary Draft Supplementary and Amending Budget No. 1 for 1984


(b) 8879/84
Letter of Amendment to the Preliminary Draft Supplementary and Amending Budget No. 1 for 1984


(c) (Unnumbered)
Draft Supplementary and Amending Budget No. 1 for 1984


(d) 10222/84
Amendments and Modifications by the European Parliament to the Draft Supplementary and Amending Budget No. 1 for 1984


1985 Draft Budget


(e) (Unnumbered)
Draft General Budget of the European Communities for 1985

(f) 9482/84
Letter of Amendment to the Preliminary Draft Budget of the European Communities for 1985


(g) 10690/84
Amendments and proposed Modifications to Draft General Budget for 1985


Own Resources


(h) 8454/84
Amended proposal for a Council Decision on the Community's system of own resources


(i) 8445/84
Draft Regulation introducing reserve measures to cover requirements in 1985


(j) 8514/84
Commission Communication concerning budgetary requirements of the Community in 1984 and 1985


Financial Regulation


(k) 5899/84
Amended proposal for a Council Regulation amending the Financial Regulation of 21 December 1977 applicable to the general budget of the European Communities


Budgetary Discipline


(l) (Unnumbered)
Budgetary Discipline: common position of the Council of Ministers

Relevant reports of European Legislation Committee

 (a) HC 78-xxxiii (1983–84 paragraph 5.
 (b) HC 78-xxxv (1983–84) paragraph 3.
 (c) HC 78-xxxv (1983–84) paragraph 3.
 (d) HC 5-i (1984–85) paragraph 5.
 (e) HC 78-xxxv (1983–84) paragraph 2.
 (f) HC 78-xxxv (1983–84) paragraph 2.
 (g) HC 5-iii (1984–85) paragraph 3.
 (h) HC 78-xxxiv (1983–84) paragraph 1.
 (i) HC 78-xxxiv (1983–84) paragraph 1.
 (j) HC 78-xxxiv (1983–84) paragraph 1.
 (k) HC 78-xxxiii (1983–84) paragraph 3 and HC 32-xviii (1980–81) paragraph 3.
(l) HC 5-ii (1984–85) paragraph 4.

Mr. Neil Kinnock: I hope there will not be a rebellion because we are to have only a couple of weeks off for Christmas. Will the right hon. Gentleman give an assurance that, following the usual precedent on constitutional matters, the Committee stage of the Representation of the People Bill will be taken on the Floor of the House? We shall want a statement next Monday on the report of the European Community Environment Council. Following that, may we have an undertaking that in Government time there can be a debate in this House on acid rain? In view of the statement made yesterday by the Secretary of State for Education and Science and the recent enlightening debate in another place on the research councils, debate in the near future in Government time on science and science policy?
Finally, the Government's plans to hold a debate late next Monday night on the order to abolish elections for the metropolitan counties and the Greater London council is


thoroughly shamefaced and shameful. Because it is such an important—indeed, unprecedented—matter, I ask the right hon. Gentleman to take the matter away, think about it and allow us to have that debate in prime time, when the full attention of the nation can be focused on this place.

Mr. Biffen: Perhaps I could deal with those points in the order in which they were raised. I understand that the usual channels are at the moment reviewing what aspects of the Committee stage of the Representation of the People Bill would be suitable for the Floor of the House. I recognise the constitutional import of what the right hon. Gentleman says. I shall ensure that a statement is made on the report of the European Community Environmental Council.
As for acid rain, the Government have now made known their views on the report of the relevant departmental Select Committee. I agree that a debate should take place in the reasonably near future.
I note the right hon. Gentleman's request that there should be a debate on science policy in Government time. I cannot be forthcoming on that matter today, but I note the request.
I reject the right hon. Gentleman's use of the word "shamefaced" in relation to the amount of time being allocated for the Local Government (Interim Provisions) Act 1984 (Appointed Day) Order. He will appreciate that, as the result of a decision taken last night, the debate will last for three hours and I cannot offer any prospect—

Mr. Dennis Skinner: It is the middle of the night.

Mr. Biffen: It is not. It is absurd to say that once we stray past 10 o'clock, we are in the middle of the night.
I have no wish to hold out false hopes to the right hon. Gentleman on this matter, but clearly it is an issue which could be pursued through the usual channels.

Mr. Robert McCrindle: In view of the effect that a move towards the taxation of lump sums under occupational pension schemes or towards discontinuing tax relief on pension contributions would have on the budgets of millions of people, will my right hon. Friend consider suggesting to the Chancellor of the Exchequer that if, happily, he has decided against such a move, it might relieve a great deal of anxiety if he could be persuaded to make a statement to that effect in advance of the Budget?

Mr. Biffen: It would be thoroughly undesirable if the Chancellor of the Exchequer were bounced on decision after decision to deny representations of lobbyists. My hon. Friend makes a fair point in representation to the Chancellor. It is best proceeded with through the normal delicacies that occur in representation to the Treasury at this time of the year.

Mr. J. Enoch Powell: Does the right hon. Gentleman agree that the division of a Bill in Committee between the House and Standing Committee, though we have become accustomed to it in recent years in connection with the Finance Bill, is inherently undesirable and results in a less satisfactory consideration of the Bill and a net increase in the time spent on Bills?

Mr. Biffen: Yes, but I have to point out to the right hon. Gentleman that that is what happened to the London Government Bill of 1963, to which he lent his hand.

Mr. Tim Yeo: Does my right hon. Friend agree that it is useful for the time of the House to be directed to subjects of national importance? In view of that, would not the unnecessary prolonging of the coal strike by Scargill's stormtroopers, who are destroying jobs inside and outside mining communities, be a highly appropriate subject for debate?

Mr. Biffen: There is no provision for a debate next week and I must confess that I cannot hold out to my hon. Friend the prospect of an early debate. Doubtless he can use the other opportunities that exist for him.

Mr. Alfred Morris: The grapevine has it that the inspector's report on the Stansted inquiry will be published on Monday. Will there be a statement about the report on that date, and when can we expect a debate? Has the right hon. Gentleman seen my early-day motion 146, which is supported by 225 right hon. and hon. Members on both sides of the House?

[That this House, deeply concerned to achieve balanced economic growth throughout the United Kingdom, and believing that the proposed massive expansion of Stansted Airport would produce unjustifiable urban growth and congestion in North West Essex and East Hertfordshire, calls upon Her Majesty's Government to opt now for a policy which, while providing for a modest increase in activity at Stansted, subject to a fixed ceiling, would place the greater emphasis on taking all possible steps to expand the use of provincial airports to meet demands in the region of its origin, the case for which has been well documented and shown to be financially viable by various groups, notably the North of England Regional Consortium .]

Mr. Biffen: I have no knowledge of when the Stansted report is likely to be received, but, as the right hon. Gentleman will appreciate, the Government have already said that there will be a debate on the report before any Government decision is taken.

Sir Ian Percival: I recognise and greatly appreciate the importance that the Government attach to the views of Back Benchers, as was so recently demonstrated by their ready response to an early-day motion signed by a mere 154 hon. Members. May I hope for an equally sympathetic response to my early-day motion 37 on the Brighton outrage, terrorism and capital punishment, which has been signed by 180 hon. Members?
[That this House extends its deepest sympathy to the relatives of those killed in the Brighton bombing on 12 October and to those injured; deplores the indescribably evil and cowardly actions of those who perpetrated this outrage; re-affirms its total resolve that the freedoms of which it is the guardian must never be lost or lessened by violence or the fear of it; thanks the Prime Minister, for having so stated so clearly and firmly on behalf of the nation; and is of the opinion that death should be the penalty for acts of terrorism causing death.]
May I remind my right hon. Friend that millions of people regard it as outrageous that anyone should try to kill our Prime Minister and Cabinet—and come so close to succeeding—and, in the process, kill and maim so many; that a debate will not cost the Government a single penny, a fact which, I hope will also appeal to my right


hon. Friends; and that a debate would give great satisfaction to many supporters of the Government inside and outside the House and to millions of others.

Mr. Biffen: I acknowledge at once that my right hon. and learned Friend speaks for many in their deep anxiety on this topic. Of course, I shall give serious consideration to the point that he has just made, but I hope that he will match that with a sympathy for the difficulties that I have on the amount of business that lies ahead.

Mr. Don Dixon: Will the right hon. Gentleman find time to debate the important statement that was made last week on the £200 million cut in regional aid, bearing in mind that regions such as the northern region have lost 100,000 jobs since the Government came into power in 1979, and that, as a result of that statement, it will lose £180 million in grants over the next 10 years?
In addition, since that statement was made, it has been announced that 2,100 jobs at British Shipbuilders will be lost, 246 jobs at Jarrow steelworks and 360 jobs at Cape Insulation in the constituency of my hon. Friend the Member for Houghton and Washington (Mr. Boyes). Bearing in mind the number of hon. Members who tried to ask questions on that statement, is it not important that we should have an early debate?

Mr. Biffen: I accept at once that there is a desire on both sides of the House for an early debate on regional policy, and I hope to secure that.

Mr. Michael Latham: What proposals does my right hon. Friend have to allow the House to join in the consultation process which is now going on, on the Secretary of State for Social Services' document on generic prescribing? Some of us have views which we need to express.

Mr. Biffen: I trust that my hon. Friend, who is a most articulate expresser of views, will already have taken the obvious ways of representing those views to my right hon. Friend. I am sure thaat he will recognise that the debate on that topic recently was a good way of enabling the House to make known its general feelings.

Mr. Michael Meadowcroft: May I press the Leader of the House further on the Representation of the People Bill that is to be debated on Monday? Would it not be provocative and counterproductive to try to separate the Bill into parts and to take some on the Floor of the House and some in Committee? Therefore, will he take the Committee stage of that constitutional Bill entirely on the Floor of the House?
In view of the procedural mess that the Government got into yesterday over Scotland and Scottish affairs, might it not be an idea to have a debate on devolution shortly which might find widespread support on both sides of the House, and, indeed, Mr. Speaker, from you as well?

Mr. Biffen: If the hon. Gentleman had been here longer and was not so self-evidently a novice, he would realise that yesterday was in no way a procedural mess—just the natural virility of Scots Labour Members of Parliament.
May I use the first and more substantial part of the hon. Gentleman's remarks to return to the point that was made by the right hon. Member for South Down (Mr. Powell). I did not wish to be dismissive when I referred to the

experiences of the London Government Bill. I accept the force of the point made by the hon. Member for Leeds, West (Mr. Meadowcroft). Discussions are currently taking place through the usual channels, and we shall have to see what is concluded.

Mr. Ivor Stanbrook: Will my right hon. Friend consider whether there will be an opportunity during consideration of the Local Government Bill next week to make a decision about a Grand Committee for London? After all, although Scotland and Wales do not have assemblies to speak for the whole country—nor do we want .one for London—they both have Grand Committees.

Mr. Biffen: The opportunities for a decision effectively rest with the Committee of Selection, and I must leave it there.

Mr. Frank Field: Given the Government's new-found enthusiasm for listening to the views of Back Benchers, may I draw the right hon. Gentleman's attention to early-day motion 59 on hard drug abuse?
[That this House, in drawing attention to the dramatic rise in the number of drug addicts over the last couple of years, calls upon the Government to: (i) develop an effective policy aimed at breaking the hard drug supply routes to the United Kingdom which will include a large increase in the number of customs officials with special responsibility for the task, (ii) increase substantially the amount of money which is available to local health authorities to develop adequate treatment and prevention services (iii) impose the maximum sentences on convicted major drug dealers and (iv) implement the outstanding recommendations of the Advisory Council on the Misuse of Drugs, particularly those on education in the community, so that the maximum number of young people are aware of the dangers of using hard drugs.]
Will the right hon. Gentleman consult his colleagues at the Department of Health and Social Security and the Home Office and come back to the House with proposals for debate before we rise for Christmas?

Mr. Biffen: On the point about the enthusiasm for listening to the views of Back Benchers, may I say that that is overwhelmingly influenced and determined by the inherent merit of the representations. I shall refer the early-day motion to my right hon. Friend so that he may be appraised of the hon. Gentleman's anxieties.

Mr. Harry Greenway: Is my right hon. Friend aware of the tremendous concern among all law-abiding people in the country—especially those belonging to students' unions—about the illegal donation by the polytechnic of North London from public funds of £1,000 to striking miners? The National Union of Students has said that that action is in breach of Government guidelines on the matter issued by my right hon. and learned Friend the Attorney-General. Will my right hon. Friend ask the Attorney-General to come to the House and make a statement on the matter with a view to a proper prosecution of the polytechnic?

Mr. Biffen: As I understand it, the matter is now before my right hon. and learned Friend the Attorney-General, and I think that for the moment it might be appropriate to leave it there.

Dr. Jeremy Bray: Will the Leader of the House give priority to his undertaking to the Leader of the Opposition that he will consider early debate on science and science policy? Is he aware of the concern of the scientific community and of many hon. Members on both sides of the House about just what the Government are up to with regard to the science budget?

Mr. Biffen: My response to the Leader of the Opposition had all the courtesy and inherent respect which I bear towards the right hon. Gentleman, but it was, even so, somewhat tepid. However, I take note of what the hon. Gentleman says.

Several Hon. Members: rose—

Mr. Speaker: Order. There is an important debate to follow business questions, and another statement. I fully appreciate that this is prime Back Bench time, and I propose to allow business questions to continue for another 10 minutes, during which time I hope that I shall be able to fit everybody in.

Mr. Nicholas Winterton: My right hon. Friend implied a few moments ago that 10 o'clock does not in his view fall in the middle of the night. I should like to advise my right hon. Friend that Wednesday 9 January falls in the middle of my recess. Will my right hon. Friend take that as a warning?
I should also like to ask my right hon. Friend about a matter raised by the Leader of the Opposition and other hon. Members, relating to the Representation of the People Bill. Can he so organise proceedings on the Bill that important matters will be taken on the Floor of the House before it proceeds to a Standing Committee, so that those of us who strongly object to the raising of the deposit to £1,000 may register our disapproval on the Floor of the House, where it should be registered?

Mr. Biffen: My hon. Friend is reputed for the ruthless inner logic that he brings to politics. That being so, it is just possible that he may decide that coming back a touch early in January will enable those matters to be taken on the Floor of the House.

Mr. D. N. Campbell-Savours: Is it not true that the Government are deliberately dodging a full discussion of the document produced by the five academic accontants on the subject of the National Coal Board's accounting procedures? Why does not the Leader of the House put it to the Prime Minister that Parliament would be satisfied if there were a full debate on the matter? Many hon. Members believe that, if that debate took place, some compromise positon might be found to help the National Union of Mineworkers and the NCB to reach an earlier settlement? Is it not the duty of the Prime Minister to find an early settlement, even if doing so necessitates using that document?

Mr. Biffen: I think that the five academic accountants are to be elevated to the status of the Tolpuddle martyrs in the mythology of some Opposition Members. I can say only that no provision has been made for a parliamentary debate on the matter next week. [HON MEMBERS: "Why not"] Why not? Because we have before us a substantial agenda of issues on which discussion is desired by both sides of the House, and the settlement of the miners' dispute could easily proceed the moment that Mr. Scargill and his advisers took the NACODS settlement as the basis for further talks.

Mr. Teddy Taylor: My right hon. Friend did not mention the European Communities (Definition of Treaties) (Undertaking on Supplementary Finance for the Community) Order among the orders for debate on Tuesday. Can we assume that there is no question of the House being asked to approve the order next week?

Mr. Biffen: As my hon. Friend knows, the matter is still being considered in the courts and it would not be appropriate for me to anticipate the outcome. However, in a sense of realism, he can assume that it will not feature in our business on Tuesday.

Mrs. Ann Clwyd: Is the right hon. Gentleman aware that, during an all-party 'visit to Greenham Common yesterday, the American colonel in charge of the base described what would take place in the event of a nuclear war? He said that the command to launch the missiles would come from General Bernard Rogers to two American personnel in the Greenham Common base, that they would go to a safe, open it, see whether the envelope inside matched the code given to them by General Rogers and then launch the missiles. Does the right hon. Gentleman agree that the House ought to have an early debate on who controls the firing of cruise missiles?

Mr. Biffen: I shall certainly draw the attention of my right hon. Friend the Secretary of State for Defence to the hon. Lady's graphic description. Perhaps we might leave the matter there for the moment.

Mr. Tony Marlow (Northampthon, North): As my right hon. Friend said, there is an important debate on European affairs on Tuesday next week. My right hon. Friend is a keen student of European affairs. How is it that the financial mechanism will be binding on the Council of Ministers when account can be taken of exceptional circumstances? As we are to debate the issue next week, it would be useful if we knew now what the Government's views on this subject are.

Mr. Biffen: My part in this drama is to provide the time—my hon. Friend will provide the answers.

Mr. Nigel Spearing: Although I appreciate that the Leader of the House is not responsible for the complex numbering or titling of European documents or for the number of minor amendments that need to be taken, does he agree that the major topics should be announced during business questions? In that regard, can he tell us whether the disciplinary document, to which the hon. Member for Northampton, North (Mr. Marlow) has just referred, will be debated on Tuesday and, if so, whether it will be part of the substantive motion?

Mr. Biffen: I strongly agree with what the hon. Gentleman said about how we present to the House the form in which we expect debates to proceed. I shall see whether some improvement can be made. As to his specific point about the disciplinary document, my understanding is that the answer is yes.

Mr. Barry Henderson: Does my right hon. Friend recognise that there has recently been considerable abuse by local authorities of legislation which is designed to help people who, through no fault of their own, fall on hard times? Will my right hon. Friend find time soon to introduce legislation to end such abuses, which are for blatantly political purposes?

Mr. Biffen: I must confess that the legislative programme is already so heavily committed that I should mislead my hon. Friend if I held out any prospect of such legislation being prepared and embarked upon. However, I understand my hon. Friend's deep anxiety and the justification for it.

Mr. John Maxton: As the Secretary of State for Scotland failed again yesterday to make a statement on an extremely important matter, which happens far too often, and despite the fact that the Leader of the House showed his prejudice against the Scots having a fair deal in the House, will he call a meeting of the Secretary of State for Scotland, my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) and the leaders of other parties in Scotland to see whether we can find better arrangements for dealing with Scottish business in the House?

Mr. Biffen: I have an instinctive affection for the Scots. It is a most romantic affection, so I should like to disabuse the hon. Gentleman of any anxieties that he might have about my hostility. However, my affection for the Scots is matched by a corresponding affection for the usual channels and what the hon. Gentleman suggests would, I think, be best pursued through them.

Mr. Nicholas Fairbairn: In regard to my right hon. Friend's answer to my hon. Friend the Member for Fife, North-East (Mr. Henderson), will he notice that the Law Reform (Miscellaneous Provisions) (Scotland) Bill is coming before the House shortly? If the Government have the will, they can introduce legislation to prevent the abuse of ratepayers' money being used for blatantly political purposes in Scotland.

Mr. Biffen: When the Bill goes through the House, my hon. and learned Friend may be able to secure an amendment, using his admirable skills to the end that he seeks.

Mr. Max Madden: Although the Prime Minister thinks that the report by the five academic accountants is unimportant, does not the Leader of the House share the general view that, as the National Coal Board fought to repress this report, it clearly regards it as important? As defects in NCB accounting methods have a direct effect on Government policy, not least in the setting of financial targets for the National Coal Board, will the Leader of the House arrange for the Chancellor of the Exchequer to come to the House soon so that all hon. Members have an opportunity to put questions on this most important matter?

Mr. Biffen: I shall draw the attention of my right hon. Friend the Chancellor of the Exchequer to the hon. Gentleman's point. It is just conceivable that this document, which is about to become part of the New Testament, is not as compelling in its reasoning as has been suggested. Those who are concerned to bring about an early termination of the coal dispute—[Interruption.] When hon. Members have stopped trying to shout down—[Interruption.]

Mr. Speaker: Order.

Mr. Biffen: Those who are concerned that there should be an early conclusion to the coal dispute have to persuade Mr. Scargill to take the NACODS settlement as the basis of further talks.

Student Awards (Scotland)

4 pm

The Secretary of State for Scotland (Mr. George Younger): With permission, I shall make a statement about the consequences in Scotland of the decision announced by my right hon. Friend the Secretary of State for Education and Science yesterday on students' awards. As my right hon. Friend said, the minimum grant will be discontinued and the contribution to students' maintenance from better-off parents will be increased in 1985–86. This will not, however, extend to tuition fees, as originally proposed.
The changes now proposed will involve additional expenditure on students' awards in Scotland of about £5 million in 1985–86. Just over £2 million of this additional expenditure will be met by an addition to the Scottish block following from the changes by my right hon. Friend in his Department's budget and the operation of the formula adjustment to the Scottish block. The remainder will be found from within the block.
Once final decisions have been taken, I shall announce the full details of my public expenditure programmes for 1985–86 to the House. I expect to do this in the course of the next week. Subject to further scrutiny of priorities within my overall programme, it still remains my intention that additional resources will be made available to the Scottish central institutions to increase the output of engineering and technology graduates. Meantime, I am not in a position to give firm figures.
As regards the proposed review of the students' awards system, I can assure the House that it will take full account of the Scottish higher education system, and that my Department will be closely involved.

Mr. Donald Dewar: We are pleased that a statement has been made today. The Secretary of State is the Minister responsible for funding student grants in Scotland and it is essential that he is accountable to the House for his decisions. The Secretary of State for Education and Science cannot answer for Scotland, and did not pretend yesterday that he could. This is an unsatisfactory and undignified situation, and it is fortunate that the statement has been made, as it does something to remedy the damage.
On the substance of the matter, what was the Scottish component of the £39 million that was to be clawed off student grants by the original package? Although the retreat sounded yesterday on tuition fees may mean that the Government have to forgo £5 million of the planned cuts, will the right hon. Gentleman accept that the inadequate and mean-minded 3 per cent. uprating, well below the inflation rate, the harsher parental payments demanded and the abolition of the minimum grant leaves the package as a severe blow to Scottish students and their living standards?
We understand that, of the £5 million involved in this messy compromise, almost £3 million will be recouped from the Scottish Office budget, but we also understand that it will not necessarily be from the Scottish Education Department. The Secretary of State for Education and Science is finding £11 million next year, at the expense of the university programme. Some £6 million is to come from the equipment grant in 1985–86. Will the Secretary of State for Scotland give a firm guarantee that none of this


will be found at the expense of the Scottish universities, and that the other £5 million of the £11 million total sum that makes up the English package will not come from Scotland either? If it did, there would be a real danger of double jeopardy; the Scots would be paying twice.
We are very worried that Scotland has come badly out of the mathematics of this compromise. England is finding £11 million out of the total of £21 million in cuts, with the Treasury making up the balance. In Scotland, the right hon. Gentleman has to find from his budget almost £3 million out of a total of £5 million. That is a clear and obvious discrepancy, and we should like an explanation of how it has risen and why.
I come now to the decision-making process that lies behind the budget compromise. If the right hon. Gentleman was a party to the original decision on the cuts, and the subsequent disorderly and disorganised retreat, his judgment has been discredited, and he has been humiliated just as certainly as his colleagues south of the border. If he was not a party to the decision, but meekly accepted for Scottish students damaging decisions taken elsewhere, his humiliation is even more complete and contemptible.
It is widely reported that the decision taken yesterday was the result of a meeting between the Prime Minister, the Secretary of State for Education and Science and the Chief Secretary to the Treasury. The dramatis personae at this panic-stricken gathering included the acting Chief Whip, Viscount Whitelaw and even a junior Minister from the Department of Education and Science. It was the crunch meeting, which decided on the desperate attempt to save face and placate outraged public opinion, and which resulted in yesterday's statement. Can the right hon. Gentleman categorically reassure the House that he was at that meeting? If he was not, who spoke for Scotland?

Mr. Younger: I am grateful for the initial welcome to the statement. It is always a problem when any decision is taken that affects several parts of the United Kingdom whether, for the convenience of the House, one, two, three or sometimes four statements should be made. I accept that, but I am glad that we have had a statement today. The savings expected from the original package were between £8 million and £9 million in Scotland, and we expect them now to be more like £3 million to £4 million. The university programme will be treated exactly the same north and south of the border and it is my right hon. Friend's decision as to how much he gives to the University Grants Committee to do what it is asked to do. It is for the UGC to decide, as it does with every other part of university expenditure, what is to be the spread between various universities. Until we see what that spread is, we do not know whether there will be more or less in Scotland.
As to the comparisons, they are absolutely on all fours between the two countries, because Scotland is treated under the same formula and gets exactly the same treatment on this part of the programme as it does with any other. There is no difference.
As to the discrepancy between the amounts available to Scotland and the amounts in the United Kingdom, hon. Gentlemen are puzzled when they first see this, because the university system, the number of years of the course and so on are quite different north and south of the border. There is therefore a larger component for Scotland because there are four-year courses instead of three-year courses. That is logical and simple.
I note the hon. Gentleman's remarks about the meeting to which he referred. This was a collective decision, taken in a series of consultations, with which I was fully involved.

Sir Hector Monro: I thank my right hon. Friend warmly for his statement. Is he aware that many parents will be grateful for the new decision to which he has come? Will he give the most detailed consideration, particularly in Scotland, to the problems of the four-year course?

Mr. Younger: I am grateful to my hon. Friend; I shall give that careful consideration.

Mr. Bruce Milian: As the £21 million that was originally announced yesterday was specifically stated to be in respect of only England and Wales, why does part of the cost come from the budget of Scottish universities?

Mr. Younger: The right hon. Gentleman will appreciate that the figure for England and Wales is applied, as per the formula, to the Scottish block. Therefore, that has the appropriate Scottish effect. As to the general amounts given to the UGC, it is and always has been for it to decide which university it can benefit.

Mr. Barry Henderson: Has my right hon. Friend observed that, although his statement, like that of my right hon. Friend the Secretary of State for Education and Science yesterday, has been sourly received by Liberal and Labour Members, it has been warmly welcomed by my hon. Friends? Can my right hon. Friend confirm that, even on the original proposals, parents with a residual income of £13,000 will be paying less next year than this year, and that will continue to be so after the statement? Can my right hon. Friend also say what is the level of actual income which gives rise to a residual income of that type?
Finally, will my right hon. Friend make it easier for parents to be aware of the opportunities for reducing the cost of their parental contributions through the use of covenants?

Mr. Younger: I am grateful for what my hon. Friend said about the announcement yesterday. The effect on any individual parent or student very much depends on income, the number of children in the family, and so on. For most Scottish families with one child living away from home, the largest increase is unlikely to exceed £270.
My hon. Friend asks about contributions and grants generally. I agree with him that the longer Scottish courses are a relevant factor.
As for the level of residual income, broadly speaking students whose parents' residual income is below £13,000 will be either neutrally affected or slightly better off in some cases. Those above that will be worse off. Fewer than half the total number of Scottish students will be affected at all by these changes.

Mr. Gordon Wilson: I thank the Secretary of State for belatedly making the statement that in all decency he should have made yesterday. Does he accept that, of the four concessions which the National Union of Students and other students sought, the one that was chosen is more beneficial to the very high income families than to the lower and middle income families, who will be very badly affected? Does the right hon. Gentleman accept, likewise, that Opposition Members are


not blinded by his casuistical explanation of why the Scottish universities should be penalised twice over—once by being part of the Department of Education and Science budget and again by the changes that the right hon. Gentleman will be making in the rest of the education system?

Mr. Younger: Dealing first with the hon. Gentleman's second question, he will appreciate that there are two separate components in this type of expenditure. There is that which is made in the Scottish block and in England and Wales in ordinary English Department of Education and Science programmes. Then there is that which, both north and south of the border, applies to universities. They are separate programmes. The university responsibility is with my right hon. Friend the Secretary of State for Education and Science, and the money given to the universities is always given to and distributed by the University Grants Committee. Therefore there is complete fairness between England and Scotland both in the way that the non-university programmes are spread according to the formula and in the way that the university programmes are spread in the way that they always are spread.
As for the hon. Gentleman's other question, I was glad to be able to make a statement today, but he will appreciate that it is difficult to have several statements on one subject on the same day.

Mr. Nicholas Fairbairn: Will my right hon. Friend take the fullest part in the review announced yesterday by the Secretary of State for Education and Science, and in doing so will my right hon. Friend remind the Secretary of State and my right hon. Friend the Prime Minister that one of the grandest principles of education in Scotland is that those who did not benefit themselves from higher education enable their children to do so? They are not well off, as the Secretary of State for Education and Science describes them. They may be ordinary people, the mother a nurse and the father an electrician. They are making it possible for their children to do what they were unable themselves to do. If funds are to be found, they can be found easily by abolishing the absurdity, with respect to the hon. Member for Greenock and Port Glasgow (Dr. Godman), of the huge course for doctors of philosophy, which provides nothing to human education.

Mr. Younger: I am grateful to my hon. and learned Friend. I can assure him that I shall be fully involved in the review of the student grants system which is about to take place.
As for the assertion that some of the parents affected are well off, I appreciate my hon. and learned Friend's remark. It is a matter of judgment what is the precise level at which an income becomes that of someone who is well off. However, ny hon. and learned Friend may appreciate that this change takes out the principle, which many people both inside and outside the House found objectionable, of bringing in fees to the parental contribution. That will benefit people whether they are classed as having high incomes or otherwise.

Several Hon. Members: rose—

Mr. Speaker: Dr. Godman.

Hon. Members: Hear, hear.

Dr. Norman A. Godman: I never expected to be named in these exchanges. I am far too modest to recommend any hon. Member to read my thesis. I think that it is a first-class piece of work, but that is to be expected.
Moving to more important matters than my thesis or the absurd comment of the hon. and learned Member for Perth and Kinross (Mr. Fairbairn), may I ask the Secretary of State whether the position of students in Scotland and of the university sector itself would not be strengthened by a Scottish UGC or at the very least a Scottish subcommittee of the UGC?

Mr. Younger: I am interested in the hon. Gentleman's view, because several academics in Scotland have expressed views about it. However, it is a different matter from today's events.

Lord James Douglas-Hamilton: Is my right hon. Friend aware that there will be great relief among Scottish families that the proposals for the introduction of tuition fees have been withdrawn?
Was it not the late Prime Minister, Sir Winston Churchill, who said that the processes of his mind constantly readjusted themselves to the movement of outside events?

Mr. Younger: I do not know whether my hon. Friend will consider emulating the hon. Member for Greenock and Port Glasgow (Dr. Godman) and writing a thesis on that, but I have no doubt that it is a very wise comment.

Mr. George Foulkes: rose—

Hon. Members: Another PhD?

Mr. Foulkes: Not yet.
Is not it clear from the way that the proposals of the Secretary of State for Scotland were in every respect—parental contribution, the level of increase in grant, the abolition of the minimum grant and the possibility of fees—a pale carbon copy of the English proposals that the right hon. Gentleman is no longer protecting the special interests of Scotland in respect of student awards? Is it not also clear that, far from moving towards greater devolution under this Government, we are moving towards greater centralisation and copying what happens in England?
Is it not about time that the right hon. Gentleman acted as Secretary of State for Scotland in the way that my right hon. Friend the Member for Glasgow, Govan (Mr. Milian) and my noble Friend Lord Ross of Marnock used to, and protect the interests of Scotland?

Mr. Younger: With great respect to the hon. Gentleman and his right hon. Friend, the one thing that I try not to do is to act in the way that the right hon. Member for Glasgow, Govan (Mr. Milian) did when he was Secretary of State for Scotland.

Mr. Foulkes: Well, most of the time.

Mr. Younger: The hon. Gentleman alleges that my announcement is a carbon copy of the statement yesterday by my right hon. Friend the Secretary of State for Education and Science. If it is a carbon copy, it is a good, strong one and not a pale one.
As for Scotland's interests, the only inference that I can draw from the hon. Gentleman's suggestion is that he


thinks that it would be in the interests of Scottish parents to be paying parental contributions to fees when English parents are not doing so. If that is his position, I disagree totally. I have stood up for Scottish parents' interests in this matter.

Mr. Michael Forsyth: Does my right hon. Friend agree that, far from being to Scotland's disadvantage, these proposals bestow a special privilege, in that, with four-year courses, the lower contribution from parents and the fact that they do not have to contribute to tuition fees, they are getting more than English parents and English students south of the border in support from the State?
Will my right hon. Friend use the opportunity provided by the review of higher education spending, which is very much welcomed, to argue the case put forward by the principal of Stirling university, that funding of the universities should be based on the number of students that they are able to attract? That would guarantee the success of institutions such as Stirling which are able to attract students.

Mr. Younger: My hon. Friend makes a good point. To the extent that this is a help to the parents of students at universities, it is 33⅓ per cent. more help for Scottish students doing four-year courses than for English students doing three-year courses.
I take my hon. Friend's second comment. I, too, saw the interesting ideas that the principal of Stirling university expressed, and they will be studied carefully.

Mr. Tam Dalyell: What advice would the Secretary of State give to scientists working in Scotland? Would he suggest that they write long and articulate questions requiring answers to Conservative Members? Would that have some effect? Is he aware that the cut is appalling? What is the assessment of the Scottish Office of the number of alpha projects that will now be rejected? Those of us who met the vice-chancellors a fortnight ago were appalled by what Dr. Burnett and his colleagues had to tell us. Sir David Phillips, a serious science administrator, hinted in semi-public that Stirling might be one of the universities that could, in some circumstances, be axed. We do have a denial of this, do we not?

Mr. Younger: I have certainly heard no suggestion of that which formed the latter part of the hon. Gentleman's question. I feel sure that if there had been any such suggestion, we would have heard something about it. I know of the hon. Gentleman's close interest in science. I maintain a close interest as well, along with the principals of the Scottish universities, although technically they are under the Department of Education and Science. I shall be meeting them soon and I shall be discussing these matters with them.

Mr. Gerald Malone: Does my right hon. Friend accept that, far from being a humiliation, as was suggested by the hon. Member for Glasgow, Garscadden (Mr. Dewar), his statement is another welcome example of his ability to listen to Conservative Back-Bench opinion? His reassertion of the principle that university education will be free to all students and that tuition fees will not be charged is especially welcome. Will he further confirm that that is a principle to which he will give utmost force in the review?

Mr. Younger: I agree with my hon. Friend that this is very much of advantage to parents in Scotland and is something that they will notice. I paraphrase my right hon. Friend the Leader of the House and attribute the language of the hon. Member for Glasgow, Garscadden (Mr. Dewar) to his natural virility.

Mr. Malcolm Bruce: First, I welcome the statement on behalf of my colleagues. I remind the Secretary of State that it should have come yesterday. It is being made today only because of protests from the Opposition Benches—[HON. MEMBERS: "Where is Steel?"] He is leading my party! It would be more appropriate if the Prime Minister and the Secretary of State for Education and Science were on the Government Front Bench as well. The Secretary of State for Scotland has failed to convince me or my colleagues that he is able to protect Scotland's interests.
The right hon. Gentleman said in his statement—he has repeated the assertion several times since—that he recognises the difference between Scottish four-year courses and English three-year courses. If that is so, why did he accept the ruling of the Secretary of State for Education and Science in the first place? He said in the past that he could make a different arrangement for travel grants for students in Scotland. Does he recognise that he should adopt a completely different system of grants to take account of Scottish circumstances? Will he repudiate any commitment to student loans and maintain the grant system?

Mr. Younger: We shall all be somewhat interested and relieved to hear that the right hon. Member for Tweedale, Ettrick and Lauderdale (Mr. Steel) is leading the hon. Gentleman's party. As I have said, the making of statements is very much a matter for the House, in the last resort. The making of several statements on the same day on the one subject has always been a problem. The House will have to decide what attitude it wants to take on that. The original decision was taken by the Government and the change which was announced yesterday was similarly a Government decision in which I was fully involved.

Mr. Alex Eadie: The right hon. Gentleman has agreed that many parents will heave a sigh of relief as a consequence of the statement. However, against their relief must be set the great anxiety among those who are associated with scientific research in Scotland. They are concerned about their future because of funding implications. We already know that neither the Secretary of State for Scotland nor the Secretary of State for Education and Science will resign, but could they not at least have the decency now to apologise to the students who came to Parliament to exercise their democratic rights to try to influence the Government to change their mind?

Mr. Younger: It is only to be welcomed that students and many others come here to exercise their democratic rights, and long may they continue to do so. I appreciate the hon. Gentleman's concern about research budgets. However, it is too early to have concern. As I have said, I attach high priority to increasing the resources that we put into such research.

Mr. John Maxton: Can we have a guarantee from the Secretary of State that the cuts that will be implemented will not again hit housing, social work or any of the other parts of his budget? Secondly,


will he prove his independence by giving a guarantee that he will not countenance the introduction of a loans system for students in Scotland? Lastly, is he aware that the Secretary of State for Education and Science said on Tuesday afternoon that he had no intention of changing his mind on student grants and that the right hon. Gentleman has said this afternoon that he was part of a series of consultations? How many meetings took place between half-past three on Tuesday afternoon and half-past three on Wednesday afternoon, how many of those meetings did he or the Minister with responsibilities for education attend, and what part did they play in them?

Mr. Younger: I do not know about the hon. Gentleman's list of meetings. The important thing is that consultations took place on all these matters throughout the time that decisions were being taken, and all the Departments involved were closely concerned with them. My hon Friends and I are considering from where in the Scottish block we shall find the money to make up for the changes that have been announced. We shall work that out over the block as a whole. As I promised in my statement, I hope that a second statement will be made next week to set out the results of all the discussions. I do not think that it would be right for me at this stage to pre-empt a decision either for or against the loan system. It is right that that issue should be part of the review that will be conducted into the supporting of students.

Mr. Robert Hughes: Is it not the case that the Department of Education and Science for England and Wales has to find only 50 per cent. of the required savings from its budget while the Secretary of State for Scotland will have to find 60 per cent. from his? Will the right hon. Gentleman give a categorical assurance that, while he has greater flexibility within his budget to look for savings, they will not come out of the budgets of social work, housing or health? It would be the grossest of impertinence if he were to make ordinary people, who are suffering because of hard-pressed services, pay for the Government's priority in looking after the richest people who are concerned with these cuts?

Mr. Younger: The savings will not come out of any of the budgets that the hon. Gentleman has mentioned or any particular budget, because none of the decisions has yet been taken. The savings will come out of the Scottish block as a whole, and I shall decide how that can best be done. Student loans are difficult to compare north and south of the border. That is because the university and education systems generally are wholly different. However, the relationship between the English and Welsh arithmetic and the Scottish arithmetic is straightforwardly governed by the operation of the formula which is used for all these matters without variation. Incidentally, this is a welcome development for anyone running the Scottish block. My predecessors realise that and it will be realised by anyone coming after me.

Mr. Dennis Canavan: Why must the Secretary of State always act like a simple stooge of the Secretary of State for Education and Science? First, he copied his right hon. Friend's original statement and now he is virtually copying the silly and amended statement which the right hon. Gentleman made yesterday, which

will benefit only a minority of better-off parents. Will he do the decent thing and introduce a students' grant increase of at least 14 per cent. to restore the grant to what it was in 1979 when the Labour Government were in power? In the longer term, will he phase out parental contributions completely so that all students who can benefit from higher education will have the opportunity of doing so?

Mr. Younger: With respect to the hon. Gentleman, I think that he might think a little more deeply about the subject. I take his point about the reduction in the real level of grants and I am fully in support of all the decisions that the Government have taken on that. The hon. Gentleman might feel on reflection that he was rather unfair about the Scottish dimension. It is clearly desirable that parents north and south of the border should not be discriminated against, one way or the other. Some uniformity is very much to our advantage as well as to that of those south of the border. When there was a clear difference between students' travel arrangements north and south of the border, I made an entirely different arrangement from that made by my right hon. Friend the Secretary of State for Education and Science, and it was widely welcomed by students in Scotland.

Several Hon. Members: rose—

Mr. Speaker: Order. An important debate follows. I shall call all hon. Members who have been standing, but I ask for brief questions.

Mr. Bill Walker: Is my right hon. Friend aware that many Scottish parents with children at university and others who hope that their children will attend university later understand that nothing in life is free and that education is paid for by the taxpayer when no charge is made upon the parents? They understand that. Therefore, the decision reported today will be appreciated by parents of the kind referred to earlier by my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn).

Mr. Younger: I am grateful to my hon. Friend. He is right. It is worth reminding ourselves often that nothing is completely free. The system is designed to try to concentrate help on those who need it most. I accept that introducing parental contributions to fees for the first time in recent years was felt by parents to be unfair. That is why the decision was changed.

Mr. Dick Douglas: Can the Secretary of State give some clear indication of the proportion of the adjustment in terms of the University Grants Committee and that part of the budget that comes within his responsibility? Will he take into account the crisis in education in Scotland? Does he agree that, instead of curtailing university and higher education, we should be expanding?
Is it not farcical that people who are graduating today from Scottish universities with first or second-class honours would not now be admitted to university because of Government constraints? Will the Secretary of State totally oppose any loans scheme, which would be anathema to everyone in Scotland?

Mr. Younger: I take the hon. Gentleman's point about a loans scheme. He will make his views known in the next few months when the system is reviewed. I have explained the proportions between south of the border and north of the border. Universities are and always have been dealt


with through the University Grants Committee. That is the way it should be. In Scotland the arrangements are made under the formula.
The hon. Gentleman claims that funds are being reduced. I remind him that we have increased funds, which are much needed, to our central institutions for technical education. I should have thought that he would have welcomed that.

Mr. David Lambie: Why is the Secretary of State so blindly following the recommendations of his right hon. Friend the Secretary of State for Education and Science, who is responsible for education in England? Last year the Secretary of State for Scotland gained credit among students and hon. Members from both sides of the House when he did not follow the recommendation by the Secretary of State for Education and Science to abolish travelling expenses. He continued to grant travel expenses to students in Scotland.
Why does the right hon. Gentleman not accept today that traditions in Scotland are different? Will he examine again in the promised review the possibility of reducing parental contributions and of maintaining the minimum grant?

Mr. Younger: I am grateful to the hon. Gentleman for what he said about my decision on students' travel. It was welcomed, and it was my decision. If I had thought on this occasion that it was in the interests of Scottish parents to make them pay a contribution to fees, I should have suggested it. I do not think that that would be in the interests of Scottish parents, so I did not suggest it.

Mr. John Home Robertson: The people of Scotland have a right to know how decisions which affect them and them alone are taken. The Secretary of State referred to a collective decision. What Scottish ministerial representatives attended that unhappy collection of Ministers?

Mr. Younger: None of the decisions was taken without the fullest participation of Scottish Ministers, whose views were taken into account before any of the decisions were taken.

Mr. Tom Clarke: Is the Secretary of State aware that he has given much less information to the House about his Department than his right hon. Friend the Secretary of State for Education and Science gave yesterday? If the money is to come from the general block, exactly where will it come from? Will it come from local government, health or housing expenditure? If the money is so vital—I cannot see that it is—why does not the Secretary of State suggest that it comes from the contingency fund, since the Prime Minister had no difficulty in using that during the mining dispute?

Mr. Younger: A large part of this money comes by means of the formula from the Treasury. I have discretion—a discretion which my right hon. Friend does not have—to take it out of the share of the general Scottish block grant. As none of the decisions has yet been taken for the spending of individual parts of that block, what we are discussing today can be taken into account before those decisions are made.

Mr. James Wallace: The Secretary of State said that, in his review of student

spending, account will be taken of the differences in the Scottish education system. Can he guarantee that if at the end of that review it appears that a system suitable for England and Wales is not suitable for Scotland, he will be free to go his own way and to make separate decisions for Scotland? If he wants to take instructions from the English Minister beside him, we shall understand.

Mr. Younger: That is not how anything works. If it were in the interests of Scottish students and of the Scottish university system for different decisions to be made, of course I would put them forward.

Mr. Harry Ewing: Is the Secretary of State aware that his repeated assertion today that he did not make a statement yesterday because it is difficult to make a number of statements in one day is completely false? Will he confirm that yesterday he made it clear that he had no intention of making any statement on the issue and that the protests registered yesterday by hon. Members on all the Opposition Benches are the reason for today's statement? The Secretary of State was dragged reluctantly to the Dispatch Box.
Is the right hon. Gentleman further aware of the widespread suspicion, shared by some of his hon. Friends, that Scotland is the subject of double jeopardy? When he comes to the House next week with what we hope will be a more definitive statement, will he deal more specifically with the reason why Scotland should pay twice? Is the Secretary of State intending to sit back and allow science and research budgets to be cut in this way?
My right hon. and hon. Friends place on record our utter disgust and lack of confidence because neither the Secretary of State nor the Minister responsible for education in Scotland attended any of the meetings which resulted in these decisions.

Mr. Younger: The hon. Gentleman knows nothing about it and his last point is rubbish anyway. I am glad to be making a statement today, particularly because I was requested to by the hon. Gentleman and others. I fully understand the position, although I doubt whether the hon. Gentleman does. This is the normal way of doing things. The relationship between financial effects north of the border and south of the border is clear and is operated under the formula. The system has been welcomed by many people for a long time. As for the so-called cut in extra technical education, we are proposing an increase for central institutions for that precise purpose. The hon. Gentleman should welcome that.

Mr. John Maxton: On a point of order, Mr. Speaker. I apologise for delaying the House again, but in answer to the question by the hon. Member for Gordon (Mr. Bruce), the Secretary of State said that statements in the House were a matter for yourself and the House. [Interruption.] Well, he said that statements were a matter for the House, which makes them therefore a matter for you. He said that he could not make a statement yesterday because that was a matter for the House. Will you clarify the position, Mr. Speaker? The House needs to know whether it is a matter for us, for you or for Ministers to decide.

Mr. Speaker: Whether a statement is made is a matter for the Minister concerned, not for me.

Autumn Statement

Mr. Speaker: I have selected the amendment in the name of the Leader of the Opposition. More than 30 hon. Members are anxious to take part in this debate. I therefore intend, once again, to apply the 10 minute limit on speeches between 7 pm and 8.50 pm. I appeal to Privy Councillors and other hon. Members who are called before 7 pm to bear in mind the interests of their colleagues and to keep their speeches brief.
It would be counter-productive for hon. Members to come to the Chair to ascertain where they stand on my preliminary list. I shall do my best to include in this debate those hon. Members who failed to catch my eye during the economic debate and the debate on the Queen's Speech. I shall give preference to those hon. Members today.

The Chancellor of the Exchequer (Mr. Nigel Lawson): I beg to move,
That this House approves the Autumn Statement presented by Mr. Chancellor of the Exchequer on 12th November; welcomes the prospect of continuing low inflation and steady growth as the basis for maintaining the trend of rising employment; and congratulates Her Majesty's Government on keeping the public expenditure planning total for 1985–86 within the figure published in the 1984 Public Expenditure White Paper (Cmnd. 9143).
This is the third occasion during the past six weeks on which the House has been able to debate the progress of the economy. I welcome this further opportunity for the House to consider in particular the statement I made on 12 November and to endorse the Government's economic strategy, which has already provided almost four years of steady economic growth with falling inflation and, despite the still lamentably high level of unemployment, a steady growth in the number of people in work since the spring of 1983.
That record owes a great deal to our resolution as a Government in tackling the relentless upward pressure of public expenditure, in reducing the share of national income absorbed by the public sector and in bringing forward resources for more productive use by private enterprise. As the Earl of Stockton in his recent and memorable maiden speech in another place said about slimming the public sector:
it is very disagreeable…But it had to be done and it still has to be done."—[Official Report, House of Lords, 13 November 1984; Vol. 457, c. 238.]

Mr. Eric S. Heifer: rose—

Mr. Lawson: Before elaborating on those matters, I should like to pay tribute to the Chairman of the Treasury and Civil Service Committee, my right hon. Friend the Member for Worthing (Mr. Higgins), and to the members of his Committee.

Mr. Heffer: Will the right hon. Gentleman give way?

Mr. Lawson: I shall not give way. The House knows that I normally give way frequently. Mr. Speaker has said that there is a shortage of time, and I shall, therefore, be a little more parsimonious than I normally am in giving way.
I pay tribute to the Committee for the expedition with which it conducted its inquiry into the autumn statement. I know that my right hon. Friend the Member for Worthing will not take it amiss if I say that I do not find myself 100 per cent. in agreement with every word of the Committee's

report. My right hon. Friend would perhaps be surprised, and some members of his Committee might even be disappointed or alarmed, if that were not so.
The Treasury and Civil Service Committee can justly claim to have something of a proprietary interest in the autumn statement, because it was in response to an earlier report by its predecessor Committee that my right hon. and learned Friend the Foreign Secretary, when he was Chancellor, presented the first autumn statement to the House in November 1982. This year's autumn statement, like its predecessors, brings together a number of announcements that fall to be made at this time of the year. I know that many hon. Members on both sides of the House recognise that its particular value lies in the fact that it allows the public spending plans for the year ahead to be set in the context of a fresh economic forecast.
We continue to make better progress on inflation than most commentators have expected, and this downward pressure should continue in the coming year. Although the forecast in the autumn statement does not predict much of a change in the inflation rate during the next 12 months, we shall still have achieved a significant period when inflation has been at or below 5 per cent. That was scarcely imaginable when we first took office a little over five years ago. Now, expectations are adjusting to that much lower rate of inflation, providing the basis for the further progress on inflation that our policies are designed to achieve.
Our policies are designed to achieve something else as well. By having a firm grip on public expenditure, holding it broadly constant in real terms over a period of years, we shall as the economy continues to expand, have progressive scope for reductions in taxation not just for the few, but for the many. We have achieved that already by an increase in tax thresholds well ahead of inflation, and I hope that we shall continue to do so. As I have said to both the House and the Committee, this occurs within a wide margin of uncertainty. The scope of perhaps £1·5 billion of tax reductions in the coming budget—

Ms. Clare Short: What about the unemployed? Tax cuts will not help them.

Mr. Lawson: —is something which will be of comfort, as the hon. Lady rightly points out, particularly to the unemployed.
We continue to hear it said that the years since 1981 have been a period of weak recovery. A closer examination of the figures shows that the pace of recovery of output has been far from weak. If growth in 1985 turns out as expected in the autumn statement forecast, the economy will have grown since 1981 by almost 12 per cent. That would more than match the output growth during the previous recovery period from 1975 to 1979. It would also compare particularly well with our competitors overseas. As the House knows, last year we had the highest rate of economic growth within the European Community. According to the Commission's latest estimates, this year, thanks to the coal strike, our rate of growth will be around the average for the Community—no better than that. Next year, however, the Commission expects us once again to be right at the top of the Common Market league table for growth. No doubt we shall hear in due course from the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) that there


has been no recovery—that it is simply a figment of the imagination since, he will argue, how else could unemployment remain so high.
Of course unemployment is too high. Of course every hon. Member wants it to be lower. Only the right hon. Member for Sparkbrook could persuade himself that the four years of recovery are somehow a complete illusion. The House knows better than that, and so do business and industry, which are now earning their best rate of return for a decade.

Mr. Jack Straw: Will the Chancellor explain something that has been genuinely puzzling me for the last few weeks? When the right hon. Gentleman wrote and published the medium-term financial strategy in 1980—when unemployment was below two million—he said that, as inflation came down and the public sector borrowing requirement was reduced, not only would output increase, but unemployment would come down. What has gone wrong?

Mr. Lawson: As inflation has come down, so employment has grown substantially.
There are three important ways in which this recovery differs from recoveries in recent times. First, this recovery has been accompanied by a sharp and necessary rise in the profits of industry and commerce. Secondly, there has been no great resurgence of stock building. In past recoveries, there was a great growth of stock building which proved to be an element of instability, because subsequently companies and industries tended to destock. In many cases, that is what caused the end of the recovery. Other recoveries have had to come to an end because of a resurgence of inflation, which has conspicuously not occurred during this recovery.
One great remaining worry is the level of unemployment. The level of unemployment could have improved if only real wages had grown less rapidly. It is no use the Opposition closing their eyes to that fact. I was interested to note that last weekend every Head of Government who attended the European Council meeting in Dublin — including the Socialist President of France, Mr. Mitterrand — approved the Commission's annual economic report which has, as its first item under the heading "For the expansion of employment", this statement:
strict moderation in the evolution of real wages, consistent with the objective of achieving a pause in the growth or even a reduction in total real labour costs, which, with lower taxes and lighter burdens of employment regulation, would mean a cost structure of firms that would be more conducive to employment expansion.
That is the policy not merely of this Government but of everyone throughout the Community who has responsibility for dealing with the very difficult and intractable problem of unemployment.

Ms. Clare Short: Will the right hon. Gentleman give way?

Mr. Lawson: However well we do in improving our own economic performance, we are inevitably exposed to the world background. The forces of protectionism threaten to poison the trading climate and weaken the fabric of international economic and political co-operation as a whole, as they did in the 1930s. The recent examples of unilateral action by the United States to limit imports of steel pipes and tubes from Community countries, and Canada's decision to maintain quantitative limits on

imports of footwear, are two recent examples. The challenge before us is not merely to resist protectionism but to push forward with negotiations for further liberalisation in the framework of the GATT.
A second cause for concern remains the level of world interest rates, which is closely linked with the economic prospects for the United States. The size of the American budget deficit — in relation in particular to American domestic savings — has inevitably pushed up interest rates and thus led to a sharp rise in the value of the dollar. The counterpart to the capital inflows financing the United States budget deficit is a substantial American current account trading and payments deficit of about $100 billion a year.
The United States will soon, for the first time, become a net international debtor; indeed, it could fairly quickly become the world's largest debtor. That the world's wealthiest economy should be a persistent large borrower of capital from the rest of the world is neither a desirable nor, in my opinion, a sustainable position. No other country could sustain the imbalances that we see in the United States for as long as the Americans have done. Even they are increasingly coming to recognise the need for painful remedial action.
President Reagan made it clear only yesterday that he intends to take further action to cut the deficit. Labour Members, wo seem to persist in the delusion that the American budget deficit is a blessing that we in Britain should seek to emulate, might listen to the views of the man who has to grapple with it—the American Treasury Secretary, Mr. Don Regan. Speaking only last weekend — [Interruption.] I suspect that what he said after the election is rather more significant than what he said before the election. Mr. Regan said:
Deficit reduction is by far the most serious problem facing the US, the Administration and the Congress … Reducing the deficit is the No. 1 priority.

Mr. Peter Tapsell: I do not think that anyone would disagree that the number one problem facing the United States is its deficit. Equally, I do not think that anyone would disagree that the number one problem facing Britain is its unemployment. What does my right hon. Friend say in response to the argument that if £1·5 billion is cut off taxes, much of that will be spent on imports and will help the Japanese and German workers, whereas if the same amount of money is invested in a selective capital investment programme, very few imports will be involved but a good many new jobs will be created?

Mr. Lawson: I regard it as extraordinarily defeatist to assume that whenever the British people have more money to spend, British industry is quite incapable of meeting their needs. I do not believe it for a moment.
A third area of concern is the international debt problem. We have avoided the disasters prophesied by many, but for the future it is important for financial flows to developing countries to take forms that are better suited to their needs. That means forms by which funds are committed for a longer period, and where the servicing costs are more certain or better related to the return on the assets which they finance. In particular, that means a resumption of direct investment. Many debtor countries should ask themselves whether past inhibitions on such investment should be continued. I hope, too, that those


developed countries that maintain exchange controls that inhibit outward investment of this kind will ask themselves the same question.
We can be proud of the growing part that British capital has been able to play in the developing world since the abolition of exchange controls. Since 1979, private investment in the under-developed countries has averaged over £4 billion a year. Not only is that a multiple of official aid flows—about the maintenance of which the House was recently concerned — but private investment is a form of assistance that typically brings with it valuable managerial and technical skills.

Mr. Alan Howarth: I agree with what my right hon. Friend says about the American federal budget deficit and the profound danger that that constitutes, not least to the Third world countries to which he was referring just now, but will he agree that that deficit has been rather helpful to him in some of his very proper preoccupations in recent months?
Has not the effect of an over-valued dollar been that my right hon. Friend's oil revenues have been that much more buoyant and helped him to meet his target, and to put his £7 billion PSBR target back into place for 1985–86? Has not the effect also been that, because of the lower parity of sterling, our exports have been more buoyant, and my right hon. Friend's tax revenues have been more buoyant?
Does my right hon. Friend agree that is not a stable or sustainable set of circumstances and that we shall have to make further adjustments fiscally to achieve his objectives in future years?

Mr. Lawson: I agree with my hon. Friend, who made a rather long intervention — I am sure that he will forgive me if I do not deal with every point in it—that it is not a sustainable position. I do not think that it will mean making adjustments at present of the kind that he has suggested may be necessary in later years. But, as we get nearer to those years, if such adjustments prove to be necessary they will be made to maintain the integrity of the medium-term financial strategy. As hon. Members will know, following the London summit initiative last June, there are to be special meetings in Washington next April of the International Monetary Fund interim committee and the IMF and World Bank development committee to discuss these and other international financial issues that are of particular concern to developing and debtor countries.
Above all, the developing countries need imported capital for their development, and export markets for their goods. I cannot help noting that the declared policy intention of Labour spokesmen—if they ever again form a Government — is to inhibit the flow of capital by imposing controls, and to inhibit the flow of trade by imposing import controls. So much for their crocodile tears about the developing countries.

Mr. Kevin Barron: Will the right hon. Gentleman give way?

Mr. Lawson: No.
I have mentioned the report of the Select Committee on the Treasury and Civil Service. It focused on two points in particular—how the Government set their spending priorities, and the treatment in our plans of asset sales and debt interest.
Since 1981, when the Government first moved to a full cash planning system of public expenditure control, the discipline of holding to plans, while finding room for the areas of growth in spending within them, has involved an exhaustive search in each public expenditure survey for savings and economies across the board, and a rigorous examination of priorities both within and between departmental programmes. At the end of that process there are inevitably some very hard decisions to be made. The very difficulty of those decisions throws a spotlight on the process by which the decisions are reached, and it is to that process that I should now like to turn.
The annual public expenditure survey involves a lengthy period each year during which officials in the spending Departments and the Treasury prepare an analysis of programmes with assessments of the implications of increasing and reducing expenditure in specific areas. There are meetings of officials, both bilateral between the Treasury and the individual spending Departments, and multilateral, when the principal spending Departments come together under Treasury chairmanship to consider these matters. We then come to the decision-making phase of the survey, when Ministers make their political judgments on the basis of the factual material and the analysis provided by the officials. Ultimately, there are the decisions of the Cabinet as a whole, which exercises its judgment as to which matters it will examine in greater detail and which in less detail.
Because those decisions are important and because some of them are controversial, there is naturally much interest in the particular setting in which they are taken. If a group of Ministers meets late at night or is dubbed the star chamber, that is instantly newsworthy, perhaps more so than the issues being discussed. One point, however, is fundamental. Whatever the group of Ministers or Departments involved and whatever the forum or setting, there can be no magic mechanism for setting priorities within and between programmes. However detailed the factual basis provided by the officials and however sophisticated the analysis of output and performance for the programme concerned, in the end there has to be a political judgment and a political decision. [Interruption.] I am dealing with the report of the Select Committee on the Treasury and Civil Service to which I, unlike the Opposition Front Bench, have the courtesy to give serious attention.
There is a homely analogy to be drawn, which I tried to make when I appeared before the Select Committee. Just as when a family wonders whether to have the house painted or to go away for a holiday, or whatever, there must first be an appraisal of the costs and so on, then the decision and choice. In Government there is no utilitarian calculus that permits numerical comparison of the respective benefits of, say, an extra military aircraft as against more disaster relief or more equipment for the research councils. There is, of course, extensive analysis and appraisal, but at the end there is a political judgment to be made which in practice is necessarily determined as much by constraints as by priorities.

Mr. Robert Sheldon: I agree that there is no magical solution, but it is surely in the interests of the House that the mechanism should be more widely known. Will the right hon. and learned Gentleman tell the House whether the issue of student grants went to the Cabinet or to the star chamber?

Mr. Lawson: All issues are set before the Cabinet, including that one.
There are two final points on this subject. After looking carefully at a range of spending programmes, Ministers may often make a judgment in the light of what the analysis reveals about the pressures on a particular programme and then set that programme at a particular level, leaving the Minister in charge to decide precisely how the total should be distributed among the various elements in the programme. That was touched on in the Select Committee report. I see no possible objection, methodological, constitutional, political or otherwise, to such a proceeding. If the Minister responsible thinks that he can improve on the benefit delivered by a given total expenditure, he must be free to do so.
Importantly, though not surprisingly, the repetition of the process that I have described in successive public expenditure surveys produces over time a marked change in the composition of public expenditure in line with the priorities of the Government of the day. If hon. Members take a close look at the Green Paper, "The Next 10 Years", published at the time of this year's Budget, they will see that very large shifts have occurred within total public expenditure since 1978–79 — shifts determined by the Government's policies, pledges and priorities.
The procedures for public expenditure plans are not and cannot be mechanistic either in theory or in practice. As I have said, the decisions are often controversial and always difficult, but they are made in the course of a procedure which properly constrains Ministers to weigh each decision against a range of alternatives. I note and welcome the fact that the Select Committee intends to return to this in future reports.

Dr. Jeremy Bray: That process having been gone through and a distribution of public expenditure having been announced, if circumstances then arise in which it has to be reconsidered, why does the adjustment that follows have to fall upon the same Department, in yesterday's case the Department of Education and Science, which then has to find more money to the detriment of the science budget than to the detriment of the Chancellor's freedom to cut taxes in the Budget?

Mr. Lawson: There are two answers to that. First, it is the Government's policy to maintain the overall level of public expenditure broadly constant in real terms. That is an overall constraint due to our policy of providing scope for progressive reductions in the burden of taxation. Secondly, within that constraint—I believe that this is true for any Government—choices then have to be made and more money for one heading of public expenditure inevitably means less for another.
The Select Committee also recommends that asset sales should not be treated as negative expenditure and that debt interest should be included in the planning total. The Select Committee recognises that that is well-trodden ground and the Government's position has been made clear on a number of occasions. Purchases of assets add to public expenditure, so it is entirely consistent for sales of assets to reduce it. Since the planning total is a control total for public expenditure, it is more sensible for it to include debt interest, which is susceptible only to very limited short-term control. That does not mean, however, that either asset sales or debt interest are ignored. Debt

interest is taken fully into account in assessing the total public expenditure position. As I have repeatedly pointed out, the composition of public expenditure and receipts is taken into account in assessing the appropriate size of the public sector borrowing requirement.
The real and important question to which all Governments must address themselves, however, is whether on the basis of existing definitions the PSBR is too high or too low or, perhaps, at the right level. I note that the Select Committee is silent on that, although no doubt we shall be hearing the views of its Chairman, the right hon. Gentleman—[HON. MEMBERS: "He is your right hon. Friend."] Indeed, he is my friend as well as my right hon. Friend the Member for Worthing.

Mr. Tony Marlow: As my right hon. and learned Friend the Chancellor has said, if more money is to be spent on a particular programme, that money must be found elsewhere. We are all concerned about the level of Government expenditure. But why must it be found from the same Department? Why can it not come from the total realm of public expenditure?

Mr. Lawson: In the case to which my hon. Friend refers, exceptionally an increase of £10 million was allowed for the programme in question. Nevertheless, when an agreement has been concluded between the Treasury and a spending Department, very special justification is required to reopen agreements already reached.
As I have said, the treatment of asset sales is well understood. Far and away the most important implication of asset sales, however, is the policy that lies behind it — privatisation. The privatisation programme is on course and proving outstandingly successful. Twelve major companies, a number of other enterprises and more than 400,000 jobs have been shifted from the state sector to the private sector. I stress the jobs aspect deliberately. Enough companies have now been privatised to show that privatisation is a textbook proof of the benefits of free market enterprise over collective state activity. The common thread running through each of those privatised companies is a higher turnover, leading to higher profits, more investment and more jobs. That can be seen right across the board. That is why privatisation is and will continue to be a major element in our economic strategy.
A central feature of that strategy is encouraging the spread of individual ownership. We want to make a reality of the vision of a property-owning and earning democracy that Winston Churchill and Anthony Eden first put before the British people. Last month's successful sale of 3,000 million shares in British Telecom was a massive leap forward in achieving that objective. In one day 2 million people became direct owners in one of the growth industries of the future. Probably well over 1 million of them had never before owned shares directly. When we first proposed the sale of more than 50 per cent. of British Telecom we were told that it could not be done, that it was impossible, that the market could not cope with anything of that size, that individual shareholders would not want it, that there were not enough of them to take up the offer, and that the rest of the world would spurn it.
Nevertheless, we decided to go ahead, and the ensuing sale was an outstanding success. It is the largest single issue ever undertaken in the world. It proves that the City of London has unrivalled ability in organising and


arranging new finance. The sale increased from more than 170,000 to 400,000 the number of workers who have joined the free enterprise sector. It released from the shackles of state control a company of world stature in one of the industries on which our future will depend.

Mr. Eldon Griffiths: Is my right hon. Friend aware that in my constituency, and I suspect in many others, many people who successfully purchased British Telecom shares were tenants who purchased their council houses, and five years ago never imagined that they would own either their houses or shares in any enterprise?

Mr. Lawson: My hon. Friend is absolutely right. The sale is a central strand of our strategy and is of first and fundamental importance in the sort of society we wish to create.
The successful sale of British Telecom holds two important lessons. First, it reveals a vast and untapped yearning among ordinary people for a direct stake in ownership of British enterprise. They do not want the spurious, theoretical ownership offered by state capitalism. They are not even totally satisfied with the somewhat remote ownership offered by institutional capitalism. They want a direct stake in particular firms, with which they can indentify.
Investment in shares has begun to take its place with ownership of a home and either a bank or building society deposit as a way for ordinary people to participate in enterprise and wealth creation. We are seeing the birth of people's capitalism.

Mr. Dennis Skinner: Is the Chancellor of the Exchequer aware that his theory might totally satisfy all his Conservative supporters if, on Sunday 30 September one of the giants in the City, Johnson Matthey—despite being in the private sector and not having had a ballot to decide the issue—had not had to be rescued by the Government and the Bank of England, the taxpayers' bank, with a sum of £75 million? Those entrepreneurs at Johnson Matthey were running an uneconomic unit and their reserves became exhausted—the Government's argument regarding coal mines. Why, when the Government are so bent on privatisation and a property-owning democracy, did the Government use the Bank of England to rescue their crooked City friends?

Mr. Lawson: I am not sure whether on reflection the hon. Gentleman will feel that his last words were appropriate. I may have something to say about that in due course, but not today.
The second lesson from the British Telecom experience is that 2 million people have chosen to ignore the Labour party's threat of renationalisation. They have put their money on the table, and put it on the blue square. The weight of their money says that there will never by another Labour Government—at least not for so long as the Labour party remains committed to nationalisation, Socialism and the destruction of free enterprise.
The millions of ordinary people, from taxi drivers to pensioners, who have brushed aside Labour's threats of renationalisation will give business a whole new injection of confidence to plan ahead and take full advantage of opportunities for enterprise and growth, which only a free enterprise society can offer.
As the right hon. Member for Sparkbrook is always a little coy about the Labour party's policies, I invite him to tell the House what type of autumn statement we could have expected from a Labour Government. Under the Labour Government there was no formal autumn statement, but an almost routine autumn crisis. In four years out of five there was a crisis, and with it came an autumn Budget to reverse the damage caused by the spring Budget or to amend the aummer or early autumn Budgets. Under the Labour Government Budgets were not merely flowers that bloomed in the spring, but weeds that flourished throughout the year. Despite that, there was not one autumn when the Labour Government could report lower interest rates, single-figure inflation, 300,000 extra jobs or 3 per cent. growth.
We shall ask the House to reject the Opposition amendment. There is one phrase in it—the allegation that our policies are calculated to sustain a high degree of unemployment — which we reject with anger and disdain. It is the very antithesis of the truth. All our policies are calculated to improve the prospects for generating jobs that can be sustained into the future. No party would deliberately foster an increase in unemployment as an objective of policy. Political parties may, and do, differ as to the best means of eradicating the scourge of unemployment, but all parties are united in pursuing that objective, as they should be.
The allegation in the Labour party's amendment demeans those who made it. What is more, it comes ill from a party that knows that the miners' strike is destroying jobs, yet calculates that it is in its interest to support that destructive conflict as long as it persists. It comes ill from a party that knows that excessive pay destroys jobs, yet calculates that it is in its interests to support militancy wherever it manifests itself. The allegation comes particularly ill from the right hon. Member for Sparkbrook, who has admitted that the Labour party's economic policy is "fatally flawed", because it ignores the link between pay and jobs. Yet, with cynical calculation, the right hon. Gentleman remains the spokesman for a policy that he has described as "incredible".

Mr. Nicholas Winterton: My right hon. Friend has touched on the most critical of all matters that face the country, unemployment. Will he tell the House what the cost in money terms of unemployment is? In doing so, I respectfully ask him to answer the question put earlier. If some of the money wasted on paying unemployment benefit and financing all the manpower schemes that the Government have introduced were directed to selected capital projects, would that not be of great benefit to the country and reduce unemployment?

Mr. Lawson: There is no benefit in capital projects unless they are worth while in their own right. I am surprised that my hon. Friend says that manpower projects are a waste of money. The youth training scheme, in particular, on which we are spending unprecedented sums, is extremely valuable to young people who will find the jobs of the future.
The alliance also participates in this shabby and cynical calculation. Its policy on jobs, such as it is, has shrunk to the proposal that we should spend £1 billion on road building and other major construction projects. Yet all


hon. Members know that there is not a single major construction or road building project that is not opposed at local level by the Liberal party.

Mr. Richard Wainwright: When will the Chancellor of the Exchequer make a statement, that will be recorded in the Official Report, which even begins to bear out his outrageous suggestion?

Mr. Lawson: I am sorry that the hon. Gentleman is so sensitive on that point. It obviously drove home. When the Liberal party's calculations tell it where the votes lie, jobs go out of the window. It is generous in theory but completely selfish in practice. Unemployment has been growing in Europe every year but one since 1973.

Mr. Stephen Ross: rose—

Mr. Lawson: I shall not give way. I have already given way to 50 per cent. of the Liberal party.
It is absurd to say that that remorseless and tragic increase has been the calculated consequence of the diverse policies pursued by all the Labour, Conservative, Social Democratic, Socialist, Lib-Lab and coalition Governments who have been in power across Europe in the past decade. Since the general election, 300,000 extra people have found jobs in this country. Unfortunately, that is not enough to absorb the unexpectedly large number of people seeking jobs, but it is a much better performance than the rest of Europe, where the number of jobs appears to have continued to shrink, and where unemployment continues to increase faster than in this country.
Those countries that have been the most successful in creating jobs have been those across the Atlantic and the Pacific, which have relied more upon free enterprise, low taxation, fewer controls, non-militant unions and flourishing enterprise culture. Those are the policies that this Government are seeking to introduce to enable this country to generate the jobs and create the wealth that we all wish to see.
The real weakness of the Opposition's case lies not in what they say but in what they fail to say. In repeated debates in the House they have made virtually no attempt to spell out a credible and coherent explanation of how they would resolve the problems that this and every other major country face. To them, 3 million unemployed is not a problem to be solved, but a tragedy to be exploited. They are like a doctor who offers his patients sympathy but refuses any diagnosis, prognosis or prescription. Real compassion requires from us more than sympathy. It requires a willingness to face tough choices and to stand up to vested interests.
Unless the Opposition parties are prepared to tell us what they would do—and why it would work now when it failed in the past and has been rejected by nearly every Government in the free world—those parties will find themselves in the wilderness not just for a few years but for a generation.
The Government have had the courage to make tough decisions and the resolution to stand up to various vested interests. They have had the consistency to pursue a long-term strategy that offers the people of this country the vision of a free economy, which will harness their energies to the creation of jobs and the generation of wealth—wealth that we want as much for the welfare of the needy as to fulfil the legitimate aspirations of the majority of our people.

Mr. Roy Hattersley: I beg to move, To leave out from "House" to the end of the Question and to add instead thereof:
refuses to support an economic policy which is calculated to create and sustain a high level of unemployment; rejects the demonstrably false belief that a constant reduction in public spending will produce an automatice improvement in economic performance; and condemns the reduced levels of regional aid, student grants, house-building and improvement, overseas aid and social security benefit which are the real, but initially unrevealed, consequences of the Chancellor's Autumn Statement.
There is one aspect of the Government's motion to which I offer an immediate and heartfelt welcome. At least we have been spared the counterfeit compassion and pretence that unemployment is soon about to fall. We must assume that the Government have accepted the advice offered to them three weeks ago by the Financial Times which said:
It is impossible to get away for ever with saying that unemployment will shortly begin to come down or at least level off if plainly it does not.
Until today, or until the Chancellor of the Exchequer addressed the Treasury and Civil Service Select Committee and told it that his estimates on unemployment had proved false, the Government's reaction to every complaint about rising unemployment was to say, "Wait a little longer and things will get better soon."
The nation and the 4 million—that is the true figure —unemployed, have now been waiting for five years, and things have become continually worse. At least it says something for the Chancellor's political acumen that he has at last begun to abandon the pretence that a strict and rigorous control of public borrowing and a constant reduction of the monetary aggregate will lead to a certain and automatic reduction in unemployment. That theory, on which the medium term financial strategy was based, and upon which all the false promises of reduced unemployment were based, is palpably wrong. It does the Chancellor's political acumen credit that he no longer pretends what has been the main thesis upon which the Government have attempted to defend their unemployment record since 1979.
Even the Government have abandoned—I welcome that abandonment—the combination of ignorance and hypocrisy which produced the constant promise that unemployment would fall. Today's motion and today's speech by the Chancellor—despite all the bogus anger at the end — offered no policy for dealing with unemployment. That is because the Government have no policy for unemployment except to sit back and watch it rise year by year while they concentrate upon the economic objectives which are more important to them and their class.
The autumn statement reaffirms the strategy — I use the word again — which intentionally increased unemployment and will increase it still further. That is the strategy for which the Government supporters will be voting tonight. They may wring their hands about the plight of the unemployed, and briefly bare their souls during the unreported evenings of economic debates; they may anonymously dissociate themselves from the Chancellor of the Exchequer privately—courtesy of the Lobby system — but tonight they will troop into the Division Lobby to vote for a high unemployment policy.
That, in the view of the Opposition, is the central issue of the debate and the issue with which the Chancellor has failed lamentably to deal. The central issue of the debate and of politics today—indeed, the great moral question facing the nation today—is the level of unemployment, the existence of an alternative which can reduce that level and the Government's unwillingness to adopt that alternative because they have higher priorities in other spheres.
Before I describe that alternative—the alternative that the Chancellor persists in saying is never offered to him but which is offered to him not just by me but by my right hon. and hon. Friends but by a large number of his Back Benchers who have tried to put the case to him today—I wish to deal with two other aspects of the autumn statement.
The first is the credibility of the figures upon which the autumn statement is based, and, in consequence, the credibility of the Chancellor. Everything that the Chancellor says is treated with virtually universal suspicion. It is the fate of most Chancellors of the Exchequer to be accused of deception by their opponents. The Chancellor has moved to the Back Benches. That is a new presence. I shall repeat the passage that I am anxious that the Chancellor should hear. It is the fate of most Chancellors to be accused by their opponents of deception, but this Chancellor's great achievement is that he has managed to be accused of it by his friends. Let me quote to him from the Daily Telegraph a leader called "Autumn Fudge". It stated:
it is difficult to avoid the conclusion that he is not quite telling it like it is.
On the same day, the Daily Mail rightly said:
The House of Commons wanted above all to know if there was anything in the Chancellor's Autumn Statement which might make the unemployment outlook less bleak. What those listening to him heard instead was deliberately terse generalisations.
One almost feels sorry for Mr. William Deedes and Sir David English who, after years of unremitting sycophantic support for the Tory party, are provoked by the Chancellor of the Exchequer into a moment of honest objectivity. Indeed, the Chancellor is so reckless about his reputation that he will do and say anything to avoid the real discussion on his own policies and on the record for which he is responsible. That is why he always wants to talk about what he falsely believes the Labour alternative to be. Let me tell the Chancellor, as I have told him before, that while he remains Chancellor and presides over an economy in which at least 3·5 million, and possibly 4 million, men and women are on the dole and that while he has no policy to produce a better unemployment record and no plans for reducing unemployment, we shall make him talk about what he has done and about what he has failed to do.
No matter how much he may try to run away from it, we are debating this afternoon the real consequences of the autumn statement. They were not revealed on 12 November. They were revealed by Ministers who were drafted in to fill in the details that the Chancellor chose not to give to the House. Those Ministers were required to have the courage of the Chancellor's own convictions in order to do the dirty work for the Chancellor and give the bad news about what the autumn statement really meant.
Let me give some examples of what I refer to. The cut in regional aid—already before the autumn statement 35

per cent. below the 1979 figure—is now, thanks to the autumn statement, to be cut by a further £1·5 billion over the next five years. Let me ask the Chancellor, in relation to the cut in regional aid, a question that I shall ask him continually this afternoon: why do this Government and the right hon. Gentleman always choose the high unemployment option?
Secondly, student grants have been cut by 14 per cent. since 1979. Despite turning and running, despite the scuffle, despite the U-turn, student grants are to suffer a further fall in real value of 1·5 per cent. in 1985–86. There is to be a further cut in overseas aid, an increase in water charges, an increase in the gas and electricity tax and, most significant of all concerning the real results of the autumn statement—not a word about which we heard from the Chancellor when the autumn statement was made and not a word about which we have heard from the Chancellor this afternoon — there is to be a further cut in the housing programme.
We are told in paragraph 2.15 of the autumn statement that the cut in the housing programme is £65 million. That in itself is bad enough. It is a further blow to the construction industry where 400,000 men and women are already out of work. It is a further blow for the badly housed and homeless families who will number 1 million by 1988. It is also a deception. While the reduction in gross capital provision for housing is said to be £65 million, the figures subsequently published by the Department of the Environment show that the change in the cash limit is £495 million. The two sets of figures are massaged into compatibility by the forecast that the income from council house sales will rise by £430 million next year.
I ask the Chief Secretary, on the assumption that he is to make a serious speech tonight, to state what evidence there is to substantiate the view that the income from sales of council houses will increase next year by £430 million, thus holding the cut in council house building to the figure that the Chancellor pretends it will be. According to a parliamentary answer from the Department of the Environment, quite the opposite is possible. The answer given on 9 November states that receipts from the sale of council houses have begun to decline. That is not surprising. The first flush of enthusiasm to buy is over. [Interruption.] The Chancellor must laugh at the Department of the Environment, not at me. The attempts by the Government to increase sales by the inclusion of old people's dwellings and disabled persons' dwellings has rightly been defeated.
What is more — here is another humorous matter about which the Chancellor may care to laugh, but which he may care to refer to the Department of the Environment—the Department says in its answer that it has no way of knowing whether income from the sale of council houses goes towards building more houses or whether it is used for other purposes. Yet the Chancellor blandly says, to justify his phoney figures, that because next year there will be an additional income of £430 million, the cut is only £65 million.

Mr. Nicholas Soames: Will the right hon. Gentleman give way?

Mr. Hattersley: I do not know the constituency of the hon. Gentleman, but he is the one who always seems to be attending hunt balls.

Mr. Soames: If the right hon. Gentleman were to forbid the sale of council houses, how exactly would he finance his massive building programme?

Mr. Hattersley: Let me assure the hon. Gentleman that I shall deal with the financing of the reduction in unemployment. I promise the hon. Gentleman that in a moment I shall make the case that he has asked me to make, but in my own way. May I also ask him to focus his formidable intellect upon the point I was trying to make: since there is no way of calculating the increase in the number of council house sales and of knowing what the income from council house sales will be spent on, how can the Chancellor, with any integrity, announce that that is the reason why council house building has not been cut so much as the autumn statement suggests? The answer is that the Chancellor could not with integrity make such an allegation.
The entire figure is an invention, made to balance the Chancellor's books. It has not even fooled the Building Employers Confederation, a body which is easily enough fooled by a Conservative Government. The more damage the Conservative Government do to the building industry, the more money the building industry gives to the Conservative Government. However, in this case the builders have seen through the Government. They report in their bulletin that while the Government pretend that there will be a 6 per cent. fall in building next year, in reality the fall will be 25 per cent. That is a shameful fact. It demonstrates that everybody who does business with the Chancellor—builders no less than politicians—has to look for the sleight of hand, the double counting and the dubious assumption.
The housing example which I have given has a triple significance. First, it demonstrates the Government's passion for public expenditure cuts. Secondly, it demonstrates the Chancellor's special way with figures. Thirdly, it demonstrates what I said a moment ago and shall say many times again: when given a choice, the Chancellor always chooses the high unemployment option. I say again that the Chancellor has chosen it because he has other options and priorities which are more important to him than, for instance, a building programme which would sustain a higher level of employment.
His hon. Friend the Member for Macclesfield (Mr. Winterton) urged upon him a spending programme for capital projects. The Chancellor blandly — indeed, fatuously—replied that capital spending programmes are to be commended only if what the money is spent on is worth while. [Interruption.] Let the hon. Member for St. Albans (Mr. Lilley), who laughed, tell me whether he believes that building houses for the 300,000 families who are homeless in this country is worth while. Let me ask the hon. Gentleman, or the Minister whom he serves, whether he believes that the new capital which is necessary for British Rail is worth while, whether he believes that the infrastructure for ports and roads, which is necessary for the economy of this country, is worth while. It is, I repeat, fatuous to say that capital spending is desirable only if one can demonstrate that there are projects which are desperately needed. Every hon. Member could give the Chancellor a list of capital projects which would be desirable and which at the same time would put Britain back to work.

Mr. Richard Tracey: I realise that the right hon. Gentleman does not want to be pinned down too much, but will he tell the House how many jobs he considers would be created by the list he has given?

Mr. Hattersley: I promise the hon. Gentleman that I shall give him that information. It is not a new figure. It is a figure which has been quoted by many Conservative Members, to some of whom I shall refer in a moment. It is a figure which has been offered to the Chancellor by the Institute of Fiscal Studies and by the London Business School, the Valhalla of monetarism. Everybody in this country, except the Chancellor, is prepared to calculate the number of jobs which can be created by investment in the public infrastructure.

Mr. Nicholas Budgen: Does the right hon. Gentleman agree that the rate of return for each of the proposed investments at least has to be considered?

Mr. Hattersley: When I have worked my way round to the model that I propose to describe, the hon. Gentleman will discover that we have thought of that as well. I propose to work my way round to it by dealing first with the central issue. If there is money to spare, as the Chancellor hopes and plans, how should that spare money—I put it in colloquial terms—be used?
We know that the central object of the Chancellor's economic policy is not an economic object, but a political object. It is a cut in income tax. The hard truth is that the unemployed, increasing in numbers, will have to pay for it.
It works this way: by massaging the figures, the Chancellor has produced what he calls a fiscal adjustment of £1·5 billion. That is largely a windfall, produced by oil prices being calculated in dollars and the depreciation of the pound running simultaneously with that calculation. The chief economic adviser to the Treasury told the Select Committee, to which I also pay tribute, that a fall of 10 per cent. in the sterling oil price would result in the automatic and certain disappearance of that £1·5 billion.
The Chancellor of the Exchequer seems to be shaking his head, but the comments of his chief economic adviser are on the record. If the right hon. Gentleman wishes to contradict him, I shall give way at once. Answer came there none.

Mr. Alan Howarth: Will the right hon. Gentleman give way?

Mr. Hattersley: I think that the Chancellor has a young champion who will joust on his behalf.

Mr. Howarth: The hon. Gentleman suggested that income tax cuts were a substitute for a policy to help to promote jobs. Does he seriously contend that the low thresholds of income tax that we still have, even after the improvements made by my right hon. Friend the Chancellor, have nothing to do with unemployment and do not contribute to it? Does the right hon. Gentleman deny that the unemployment trap exists?

Mr. Hattersley: I thought that the hon. Gentleman was about to attempt to deal with the point that I was making, but he asked me a different question, which I shall answer. I believe that a pound spent on reducing income tax at any level is less likely to have a direct effect on unemployment than a pound spent on public works. I shall justify that.
Before the hon. Member for Stratford-on-Avon (Mr. Howarth) sidetracked me, I was saying that the chief economic adviser to the Treasury insists that the £1·5 billion will disappear if the sterling price of oil changes by 10 per cent.
Let me reassure apprehensive Conservative Members that whatever happens, the Chancellor will find some money for income tax cuts in the next Budget—not a lot, and nothing like the additional tax burden of £22·5 billion a year imposed by a Government who were elected to cut taxes, but enough to allow them to make the bogus claim that at last income tax has been cut.
That is why the Chancellor is prepared to increase the fiscal adjustment by increasing the tax on electricity and gas. I hope that, as even the Daily Mail urges the Chancellor to stop pretending that it is not a tax, we may get a little honesty from him upon that subject. To get the surplus for a cut in income tax, national assets are being sold. To get the surplus, the Treasury is contemplating imposing VAT on books, newspapers, fuel, children's shoes and what the Treasury calls luxury foods, which turn out to be coffee and biscuits.
None of that has anything to do with economic performance, and it certainly has nothing to do with social justice. It has to do with the political imperative of cutting income tax. That political necessity, no less than other factors, such as the Government's desire to break the trade unions and their willingness to use the unemployed as a way of holding down prices, is why I repeat my accusation that the Government are intentionally running a policy which they know produces a high and increasing level of unemployment.

Mr. Sydney Bidwell: If income tax were cut substantially, would the skillcentres that are being under-used or closed throughout the country be re-opened or used more?

Mr. Hattersley: My hon. Friend makes the point that Conservative Members seem unable to grasp, even though it is so obvious. If the Chancellor is producing a £1·5 billion surplus to distribute in income tax cuts, every public expenditure cut made to achieve that surplus will have to be written off as the price of those income tax cuts. If Conservative Members do not understand that, they lack a knowledge not of economics, but of elementary arithmetic.
We have always argued—and I argue again today—that a substantial relaxation in the Government's fiscal and monetary stance is necessary for the revival of confidence and demand. However, I wish to argue my case for reducing unemployment not in my own terms of an increase in the public sector borrowing requirement, which I certainly support, but in the Chancellor's terms, because he keeps telling us that he will have at least £1·5 billion to spend. If hon. Members are honest, they will all concede that he could do more about unemployment than he chooses to do. Why does the Cancellor always choose the high unemployment option?
I refer the Chancellor of the Exchequer to the work done by the independent Institute of Fiscal Studies and the monetarist London Business School, which came to a simultaneous and agreed solution: £1 billion spent on tax cuts reduces unemployment by about 30,000 in four years,

but £1 billion spent on investment, particlarly capital investment in the public sector on infrastructure, reduces unemployment by about 185,000 in four years.
Why, apart from the political imperative, apart from the chairman of the associations who forced the change of mind yesterday, and apart from the prejudiced opinions of Conservative supporters who do not know much—and care less—about the unemployed, does the Chancellor choose to spend the money in the way in which he is determined to spend it?

Mr. Edward Leigh: Do I understand the right hon. Gentleman correctly? Will the Opposition go into the next election emulating the examples of Mr. Walter Mondale who promised higher taxes? If so, they will certainly meet a similar fate to that suffered by Mr. Mondale. Alternatively, will the Opposition emulate the example of their former leader, the right hon. Member for Blaenau Gwent (Mr. Foot) and try to fudge the issue? If so, they will meet the same fate as he suffered.

Mr. Hattersley: I will tell the hon. Gentleman what we shall do, but, first, let me tell him what we shall not do. We shall not go into the next election promising to cut taxes and then increase them by £22·5 billion a year.
The hon. Gentleman asked what we shall do. I shall repeat it shortly in the prepared part of my speech, but I tell him without hesitation that if I, whether as Opposition spokesman or as Chancellor of the Exchequer, have to choose between cuts in income tax or cuts in unemployment, I will choose cuts in unemployment. Indeed, I go further. I believe that Conservative Members, with a number of honourable and notable exceptions, mistake the mood of the country if they believe that our people say, "Let us have our taxes cut if we are working, because we do not care about the unemployed." I believe that many people in work would make the same choices as I propose to make and would give priority to tackling unemployment.
I want to say two other things about the Chancellor's proposals and his attitude to unemployment. I have already observed and rejoiced in the fact that he no longer cries crocodile tears and wrings his hands in mock horror. Nor does he any longer pretend that high unemployment is an act of malign fate which has been imposed on him by some external force. Now he is prepared to talk about possible solutions. If he is prepared to talk about possible solutions, that must mean that he believes that he could do something about it in certain circumstances.
The Chancellor talks about two solutions and I want to speak about both briefly. But first is the idea that unemployment can be reduced by lower real wages. The Chancellor must know that lower real wages will not come about. He should know that even if they did, they would not reduce unemployment. To talk about lower real wages every time unemployment is mentioned is really to look for scapegoats, not answers.

Mr. Lawson: How about an incomes policy, then?

Mr. Hattersley: I shall come to that. If there were a massive injection of effective demand into the economy, it would be important to ensure that that new demand, coming from a massive increase in Government spending, was not dissipated in an increase in money wages. But that, in conditions of expansion, is quite different from


what the Chancellor is now proposing at the bottom of a deflationary slide. If the Chancellor does not understand that, no wonder the country is in the mess that it is.
The second solution to unemployment, to which I hope the Chief Secretary will pay particular attention, was offered by the noble Lord Young on Tuesday. The solution that he offered to the National Federation of Building Trades Employers was the abolition of supplementary benefit for young people between the ages of 16 and 18. [Interruption.] Young people under 18 would have to be wiser and older than the Minister's Parliamentary Private Secretary for my initial contention to apply.
Lord Young proposed the abolition of supplementary benefit for young people between the ages of 16 and 18. When Lord Young was appointed as Minister with special responsibility for employment — or unemployment — I predicted that all he would do was produce gimmicks—a change in the figures rather than a change in the real level of unemployment. The idea that he might propose anything as cruelly heartless as removing young people between the ages of 16 and 18 from receipt of supplementary benefit never struck me for a moment. We want the Chief Secretary to tell us tonight whether that member of the Cabinet was speaking for the Government when he proposed that young unemployed people between the ages of 16 and 18 should no longer receive supplementary benefit.
I understand the benefit from that. It may well be that by doing that 150,000 or 200,000 names will be removed from the register of unemployed, but not a single job would be created. Not a single reduction in total unemployment would be achieved. Enormous hardship and suffering would be created. I tell the Chief Secretary a third time: we expect him to tell us tonight whether on Tuesday Lord Young spoke for the Government or whether that is a proposition which not even the Government will contemplate.

Mr. Neil Kinnock: He can tell us now.

Mr. Hattersley: As my right hon. Friend says, he could tell us now if he chose to do so.

Mr. William Cash: rose—

Mr. Hattersley: My difficulty, Mr. Deputy Speaker, is twofold.

Mr. Cash: rose—

Mr. Hattersley: You must sit down when I am standing up.

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. I am sure that the right hon. Gentleman does not mean me.

Mr. Hattersley: My difficulty is twofold. The first is that I am giving way more often than you, Mr. Deputy Speaker, would wish. The second is that all the questions that I direct at the organ grinder keep being answered by the monkeys. Since the Chief Secretary will not answer my question I shall let the hon. Member for Stafford (Mr. Cash) try.

Mr. Cash: Has the right hon. Gentleman accurately described what Lord Young said the other day? Did he not in fact say that it was only when young people refuse to take jobs or training that they would perhaps not get supplementary benefit? Will he please answer that question?

Mr. Hattersley: The answer is no, I did not misquote Lord Young. His speech was described extensively in the Financial Times. It was dealt with in that paper's first leader. Lord Young asked the question:
Is it right that we should pay young people for doing nothing?
The only possible conclusion one could draw from that question was his intention to remove supplementary benefit. That is what the Financial Times says he meant, and that is what I believe he meant. [Interruption.]
I understand the shame with which Conservative Members greet that proposition, but I assure them that it was the proposition of one of their Cabinet and I assure them that we shall want to know from the Chief Secretary tonight whether it was Government policy.
I am relieved, not to say delighted, that Conservative Members have reacted with such sensitivity to that latest and most brutal proposal. I am delighted that they are interested, particularly those who are from time to time inclined to parade their bleeding hearts whenever unemployment is mentioned. I recall vividly the hon. Member for Bury, North (Mr. Burt)—not now, I think, in his place—two weeks ago speaking movingly of the unemployed coming to his surgery and saying that they did not vote for him to obtain that result. They will correct that error next time. I think movingly, too, about such Conservative Members as the right hon. Members for Cambridgeshire, South-East (Mr. Pym) and for Worthing (Mr. Higgins), and the hon. Members for Aldershot (Mr. Critchley), for Loughborough (Mr. Dorrell) and for Stafford who were willing enough yesterday and the day before to sign an early-day motion, willing enough to take part in a rebellion under pressure from parents of the prosperous young people of the suburban areas of Britain, and willing enough to stand up for the urban middle classes and the grants that their sons and daughters should receive, but who have not rebelled on the subject about which they talk so much—unemployment in Britain.

Mrs. Elaine Kellett-Bowman: rose—

Mr. Hattersley: I say this to them. Their reputation for humanity and compassion—that goes for the king wet, the Secretary of State for Energy—is eroded every time they vote for the Government on the strategy which the Government now adopt. Not until they begin to rebel on unemployment shall we treat them seriously or treat them with respect. Until they vote against the Government, no matter what they say, write in The Guardian or say in the presence of a selective audience of conservative liberals, they will be supporting a Government who, despite all their protestations, adopt the high unemployment policy. We shall vote against that tonight and if they had any shame, they would do the same.

Mr. Terence Higgins: I am grateful for the kind remarks which were made both by my right hon. Friend the Chancellor and the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) about the report of the Select Committee on the Treasury and Civil Service. I am glad that it has been possible for the Committee to produce that report before the debate. That required a considerable effort and I want to pay tribute to the hard work that has been done by my colleagues on the Committee and by the clerks and the staff of that


Committee. To have before the House an analysis of what is in the autumn statement improves the quality of our debate.
In that context, may I first say a word or two about procedure for the main debates during the year? It is true that we normally have this debate on the autumn statement, followed later, usually early in the new year, by a debate on the White Paper on which the Treasury and Civil Service Select Committee also reports, and then a debate on the Budget in the latter part of the spring. Those are the three main debates on which the Committee bases its work in the course of the annual cycle.
The arrangement for the debates on the autumn statement and Budget is a good one. However, I am bound to say that I have rather more doubt now about whether the debate on the public expenditure White Paper comes at the right time. I have a feeling that the debate, over the years, has never been a tremendous success. It often comes too close to the budget itself. We might do better to have a debate on public expenditure in, say, late June or early July, when the House would have an influence on the forthcoming round of public expenditure decisions within the Government.
In the course of some of the controversies of the past few days, there has been a strong feeling that taxation and public expenditure ought to be considered together. Indeed, that is implicit in much that was said by the right hon. Member for Sparkbrook a moment ago. That was one of the recommendations of the so-called Armstrong committee report, but the Armstrong committee also stressed the importance of having a green Budget in the autumn so that the House could have an opportunity of discussing not only the main part of the autumn statement—public expenditure—but also the provisional proposals of the Government for taxation. A final decision could then be made by the Government at normal Budget time.
I am worried about the fact that, instead of setting up some formal arrangement of that kind, which would be of immense advantage, we seem to be sliding into a situation where many aspects of taxation are debated because of leaks or rumours on particular tax changes. That is not a good arrangement. It is no substitute for a proper green Budget.
There may be a strong argument for transferring the burden of taxation from direct to indirect taxes, especially if one alters the rates of tax in the traditional way by putting more on beer, cigarettes or tobacco or perhaps even on the standard rate of value added tax. However, what worries me is that in the past few weeks there has been a series of rumours about tax changes which the Government then say they cannot deny. One often gains the impression that the rumours may have arisen from informal discussions with Treasury Ministers and others. That is a bad arrangement. The rumours have concerned VAT on books, newspapers and children's shoes, and the taxation of lump sum pensions, among other things.
There may be a case for changing the balance between indirect and direct taxation, as far as rates of tax are concerned. However, we must look carefully at any proposal—and certainly any range of proposals—which would extend the frontiers of indirect taxation beyond the area where the House has decided over many years that the line should be drawn.
There is a case for a green Budget. I do not like the constant circulation of rumours at the present time, and it would be worrying if there were any truth in the rumours that indirect taxation is to be extended into areas that the House has decided, with good reason, it should not affect.

Mr. Nicholas Winterton: Will my right hon. Friend give way?

Mr. Higgins: No, Sir. I am frightfully sorry, but I understand that Privy Councillors must not take up too much time, so I should like to pursue my own line of argument.
At Question Time today, the Prime Minister stressed the importance of raising the income tax thresholds. However, it would be a mistake to suppose that one could do that on a sufficient scale to make a serious impact on the poverty trap or the "Why work?" problem. I believe that we should be moving towards a system of tax credits. Such a system might take many years to implement and fully to finance. However, it would provide a permanent solution to the problems, and that would be better than attempting to ameliorate them occasionally, or year after year, by raising the tax thresholds.
The main part of the autumn statement is dealt with in the report of the Treasury Select Committee. The central argument on which we have concentrated this year is the question of public expenditure priorities. We expressed our increasing concern that the mechanism for determining public spending priorities, which produces the result in the autumn statement, is not working as well as it should. The events of the past few days in relation to overseas aid and student grants and parental contributions seem to confirm our view.
We drew attention to the considerable danger that bilateral negotiations between the Chief Secretary and the spending Ministers may not take fully into account the true picture across all the Departments. We stressed the fact that we took evidence from officials and from the Chancellor himself. My right hon. Friend was inclined to resort to homely analogies—as he did this afternoon—and ask members of the Committee how they reached private expenditure decisions. I am somewhat suspicious of such simple analogies, but I too will resort to one in a moment or two.
What is very worrying indeed — I commend hon. Members to the relevant section of the report—is the way in which some Ministers seem to have taken the view that if they have a certain amount to spend and if there is then a cut across the board in all Departments, that must be the limit on the amount that they can spend on the Department, even though there may be a very strong case for increasing each of the items in the Department's budget. That is a very difficult matter for some Departments with very small programmes. The Foreign Office and the Department of Education and Science are classic cases. If they have to make cuts, they feel that they must do so across the board. The Foreign Secretary, for instance, may feel that he has to cut not only overseas aid but the BBC's overseas broadcasts, the diplomatic service and the British Council, when the right answer should have been that if he needed to spend more, not less, on those areas, the savings should have been found in some other Department. But it is clear that that is not the way in which matters are being handled, and that priorities are being allocated in a very dangerous way.
The statement of the Secretary of State for Education and Science yesterday was another classic case. I believe that his original proposal was wrong. It had grievous disadvantages. The House knows all about them. However, I do not share the reaction of some of my colleagues to the package announced yesterday. In some ways, that package was even worse than the original proposal. I do not say that it was absolutely worse, but it was certainly not as good as one could have done in the circumstances, because the Secretary of State believed that he had to find within his own Department the savings that he felt ought to be made.
In answer to a question yesterday, the Secretary of State said:
I should not like the House to get the wrong impression about the diminution of the money that might have to be made in the allocation to the adult education programme. As far as we can tell, it will be about £100,000 a year."—[Official Report, 5 December 1984; Vol. 69, c. 366.]
When a spending Minister feels obliged to make adjustments affecting an area of public expenditure about which many people feel strongly, but announces that he is going to cut £100,000 a year, the matter is getting totally out of proportion. To coin a phrase, one might say that the Government's policy is to make a banana skin out of every candle end.
As I said, I do not like the idea of homely analogies, but I take up the point made by my right hon. Friend the Chancellor. My right hon. Friend suggests that we should consider what an individual does. Let us do so. If someone has to buy a new pair of trousers, he does not say to himself, "This is a special spending department; I shall have to cut back on my spending on socks." He might have to consider the jewellery department and say that, if he spent a little less on jewellery, he could spend rather more on trousers and socks. But that is not happening, and at least two departmental Ministers feel that they have to make savings in the same Department. Neither economic nor political priorities are being made on a sensible basis. That is why we clearly recommend that there should be a reappraisal of machinery for determining public expenditure priorities, with special reference to the need to improve the allocation between Departments and a more open discussion of the best machinery for achieving it.
I am mindful of your remarks about being brief, Mr. Speaker, so I shall cover just two other matters. The motion refers to keeping plans for spending in line with what was said last year. Our report makes it quite clear that the relevant measures is not whether expenditure is kept in line with plans but whether plans are kept in line with out turn or, more accurately, whether out turn is kept in line with plans. There are serious problems in that regard.
We are also deeply worried about there seeming to be systematic distortions in the planning total. My right hon. Friend the Chancellor referred to two—debt interest and asset sales. The Treasury and Civil Service Select Committee's view has been, and remains, in conflict with that of the Chancellor. It is not sensible to say that proceeds from privatisation should be treated as a reduction in public expenditure. They could conceivably be treated as revenue or, as the Select Committee would prefer, as a means of financing the public sector borrowing requirement—otherwise, they give a false impression of the extent to which the Chancellor has succeeded in

controlling public expenditure. That is true in several other respects with which I shall not burden the House, but I commend our report to it.
A false impression of what is happening has been given. That brings me to the PSBR. We have to look carefully at the definitions if we are to get a clear idea about what is really happening. The Chancellor is in a better position to express his view on that than am I, but I do not think that it is badly out of line at the moment. Having looked at the forecasts that we have published and selected and those which the Chancellor has published, it is probably true that the autumn statement is rather more reflationary than the Chancellor seems willing to admit. Within the limits in which I am speaking, that is welcome.
I am more worried about the statement on the so-called fiscal adjustment. The Select Committee draws attention to the fact that, in contrast with last year, when circumstances were not vastly different, we have had statements from Treasury Ministers which clearly hold out the hope of some tax reductions in the next main Budget, to the extent of £1·5 billion. The reality, however, is that that is extremely vulnerable to changes in the exchange rate. If, by the next Budget, the exchange rate goes back to where it was at the time of the last Budget, there will be no scope for fiscal adjustment. We have to live with that. It is a new situation which arises because the exchange rate is related to the oil price, although not entirely because the oil price might change. That in turn affects revenue from North sea oil receipts. It is somewhat dangerous to predicate tax changes, which necessarily will be permanent or semi-permanent, on the basis of such good fortune, which can easily be reversed. We must take that into account.
My right hon. Friend the Chancellor referred to the effect of the American deficit. In that respect we are in danger. He referred to a balance of payments deficit, as opposed to a budgetary deficit, of about £100 billion a year in the United States. That is being financed largely as a result of the big American budget deficit, extremely high interest rates and their effect on the American dollar exchange rate which, in turn, has a repercussion on the balance of payments. That is financed by a big inflow of funds from overseas.
I do not believe that we or the Americans can assume that that inflow of funds—whether it is desirable or undesirable is another matter—will go on indefinitely. If those funds suddenly stop flowing in, everyone will decide that that is the time to get out and we shall end up with what I understand current American jargon terms a "hard landing". The implications of that, and possibly much higher interest rates to prevent the exchange rate falling, for South America and the entire financial structure are extremely dangerous. I am not yet convinced that the world community, the Chancellor or his opposite numbers in America have given sufficient attention to that problem. It is potentially very dangerous.
The dilemma is that even if the Americans take steps to reduce the budget deficit in an attempt to achieve a soft landing, we might still find that they create the same situation. I do not find that good for unemployment or any other problem. I merely raise it because the House ought to turn its attention to it, once it has dealt with the important issues that are raised in the Chancellor's statement and the Select Committee's report.

Mr. Robert Sheldon: Like many others, I am grateful to the right hon. Member for Worthing (Mr. Higgins) and his Committee for producing a report, this time only just in time for us to Use it during the important debate following the autumn statement. It clarifies the issues rather better than does the autumn statement. I agree with many of its conclusions and its lay out is wholly commendable.
Issues arising out of priorities are dealt with in paragraphs 5 and 14 of the Select Committee's report. The reappraisal of the machinery is important. The right hon. Gentleman and many of his colleagues are a little optimistic about how far we can go in that direction. I would try to achieve something much more modest. The matter has become extremely topical because of the overseas aid fiasco and the parental contribution to student grants. We can learn from the manner in which the Secretary of State for Education and Science had to come back to the House and change his course of action. There are lessons to be learned also from the way in which he had to make decisions that were based not on what his colleagues might have considered right but on the limited resources of political opinion that he was able to bring to bear.
The matter raises the issue of how Governments relate expenditure to resources. They do so in one of two ways. Either they make a total of their favoured and necessary programmes and realise that they demand a certain growth rate which they hope can be achieved, or they rely on the Treasury. The Treasury has a solution that is born out of sad experience over the years. We are fully familiar with the optimism of Ministers about the growth of resources. Their natural reaction is to oppose expenditure knowing that others will wish to overcome their restraint. They therefore stand there like executioners awaiting their call.
Neither of those methods is right. Neither undue optimism nor indiscriminate opposition to expenditure is the right approach to public expenditure. The basis of parliamentary control of spending used to rest on Members of Parliament carrying the dual responsibility for taxation, which was bad, and expenditure, which was good. In practice, those choices never come together in time. They are debated separately and any Member of Parliament can favour general economy and particular expenditure.
The problem is how we establish our priorities. Priorities are at the heart of any rational examination of public expenditure. The star chamber is not the way to handle these matters. Either there will be a preponderance of spending Ministers who are involved in the matters they discuss and are prejudiced, or there will be Ministers who are not involved and do not have the stomach for the blood-letting and butchery that is required. Because of the nature of this process, we have to look for other ways. We know that these matters come into Cabinet, where perhaps a Minister's future is at risk. Issues are fought out there, largely on the basis of the power, strength and persuasiveness of the Ministers concerned, rather than on the strength of the case that they are able to make.
Because of the unsatisfactory nature of this process, which has been with us for so long, many of us hope that there may be some role for Parliament, through the Select Committee system, to do some of the work, which would be a slight improvement. This will not happen by opposing spending programmes. No group of people responsible in

public will deny the advantage of certain programmes, as the Chief Secretary will know. Instead, we can have a better way, in which competitive bidding brings together the various pressure groups. It is astonishing how slowly the pressure groups have come to realise the importance of placing their case before the Select Committees.
It may be that through better discussion and greater involvement, we shall get solutions rather better than the one that we had this week in the case of university fees for students with better-off parents. It is better to establish priorities through pressure groups and Select Committees, which are then sifted by those who understand the political pressure — Members of Parliament — than to have Ministers coming to conclusions based on inadequate political feeling. If there is to be a fight over expenditure of public money, it is better to have onlookers there to see fair play. That is what happens in the end. At the moment, particularly with the size of the Government's majority, these matters come back to the House and the Government then find themselves faced with difficulties such as those that we saw this week.
I have been interested most in the role of the Secretary of State for Education and Science. Did he come before the star chamber to put this matter, or did he go to the Chief Secretary to the Treasury and say, "I believe that we should have cuts and I agree with them. This is what the Cabinet has decided and I shall put forward this cut as my offering to the Chief Secretary."? As I understand these matters, it would be astonishing if the Chief Secretary turned him down. The Chief Secretary rarely gets offers such as that. He has so many other problems that he will just say, "Thank you very much." Privately, he may question the judgment, but he has so many other problems on his mind that he will just think that that is one less. Therefore, the issue will not go before the star chamber or the Cabinet. Matters as important as this, or even more important, can be dealt with in this way.
I am saddened because the humiliation that a Minister may suffer is unnecessary. Other ways can be found to notify those concerned about possible proposals so that they can bring to bear the accumulated wisdom and judgment of far more people than the individual Minister who suffers some setback, as happened on this occasion. There are then the consequences of agonising over £10 million out of £132,000 million. I am the last person to diminish the value of £10 million, but nevertheless, out of £132,000 million, this matter could have been solved more readily and easily and with greater co-operation all round than it was.
My next point is covered by paragraphs 49 to 53 of the Select Committee report. It is handy to deal with the report rather than the autumn statement because the report has a more logical form. I offer that advice to the Chief Secretary. Here, we are dealing with nationalised industries, but the Government have not got it right. They have never had it right. They want to interfere, often for good reasons, but they do not want to appear to be interfering. They want the best of both worlds — to control the nationalised industries, but not to appear to be controlling them.
At the heart of the problem of the nationalised industries is the basic pretence that the Government do not interfere with them and so are not answerable to the House of Commons on their operation. This is convenient because it allows the Government to avoid answering difficult questions as to what they are up to with the


nationalised industries. If they want an industry to make a special concession of one kind or another, perhaps for a certain type of consumer or to a certain part of the country, it is much more convenient to pretend that all this has nothing to do with the Government but is the result of commercial considerations. Meanwhile, the arm-twisting goes on. We need a better way to explain the conflicting arguments and emphasise the commercial requirements.
The Public Accounts Committee, which I have the privilege to chair, is also concerned about the efficient use of resources, and as such it is a valuable ally to such bodies as share the same objectives. This should embrace both the Government and the nationalised industries. In reality, as we know, the nationalised industries are suspicious of the Public Accounts Committee because they want to be free to act commercially and do not fancy the idea of being questioned by a Select Committee. On the other hand, the Government want to ensure commercial efficiency but want to be free to take non-commercial decisions. Therefore, there is the basis of the deal here. The nationalised industries would he happy if they thought that the PAC would not be harassing them or pillorying them. Therefore, we need to show the way in which the Committee works, and we have to explain to them the kind of Committee that it is, and that it is composed of people who are interested in getting value for money.

Mr. Nicholas Winterton: As the right hon. Gentleman is putting forward this argument, would he advocate to the Government that we have a debate on the report of the Public Accounts Committee into the De Lorean affair and the waste of £85 million of public money?

Mr. Sheldon: I would be delighted to do so, and I hope that such a debate will take place, but that is another matter, which we are pursuing in other quarters.
We have the basis of a deal if we can show the nationalised industries that we can look at these matters in a commercial way, and show the Government that we can help to distinguish the commercial and political requirements. By doing this, we can help to achieve a greater recognition of commercial requirements — the very matter that should be at the centre of the Government's aims. We can help the Government to obtain more of an arm's-length relationship. If there are political necessities dictating another course of action, these will need to be paid for, on the lines of the commuters and British Rail.
The burden of proof should lie on those who do not wish to see Parliament following public money. What is required is a body with understanding of both the commercial and political realities. The PAC consists of politicians with the strong desire to get £1 value for every £1 spent. That points the way to a greater role for the PAC.
I agree with the hon. Member for Worthing about taxation proposals. It is incumbent upon the Government to make clear what their various proposals are, so that we have before us something more than the cascade of rumour about books, lower taxes on income or whatever. Let me offer a bit of warning. In 1962, the higher rates of income tax were reduced under the surtax changes. In 1972, the higher rates of income tax were reduced under the unified tax rate and in 1979, the top rate was reduced to 60 per cent. The people who benefited had clamoured for it. They took it, and they did nothing for it.
I hope that the Chief Secretary will make it quite clear that after four years of these policies it is incumbent upon

the Government to say what they now expect from spending £1·5 million in this way rather than spending the money to reduce unemployment. We have seen one of the longest periods of a continuous economic policy that manifestly has not succeeded. We have had this large increase in unemployment based upon that very policy. After such a long and continuous period of economic decline, despite all the optimistic progress reports, we need only compare the crucial figures for output, employment, unemployment and prosperity—which is what economic management is about—to see that now is the time for a fresh look at some of the objectives set out in the rosy days of 1979.

Mr. Cecil Parkinson: I listened to the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) with a good deal of interest because he began today to retract some of his more reasonable and sensible speeches of recent weeks. He has been making speeches in which he warned his right hon. and hon. Friends that it was their promise in 1983 to make a spectacular improvement in the position of the unemployed which was not believed and which he thought played a major part in the Labour party losing the general election. The right hon. Gentleman also warned his right hon. and hon. Friends that they must not make the same mistake again. He pointed out that the problem was deep-rooted, if not almost intractable, and that they would lose their credibility if they pretended that there was an easy answer.
I agreed with those recent speeches by the right hon. Gentleman, and I was disappointed when he started today to retreat from that position. He hinted at massive increases in public spending. He said that it was wrong for my right hon. and hon. Friends to be considering tax cuts. However, immediately before that, he had begun to point out that, with our present tax thresholds and our present rates of tax, unless the thresholds were changed, a number of the unemployed would start to pay income tax.
As the right hon. Gentleman knows, income tax is paid overwhelmingly by those paying at the basic rate, and it was the hon. Member for Birmingham, Perry Barr (Mr. Rooker) and Mrs. Wise, whom no one would ever accuse of being Right-wing Conservatives, who recognised the injustice of not raising the tax thresholds and that it was the low paid who would be hardest hit if they were not raised.
When Opposition Members talk about how they would spend the money saved by not cutting taxes, I hope that they will remember that they are proposing to penalise those at the bottom end of the incomes scale who start to pay tax at too high a rate on too low an income. Therefore, let us not talk about tax cuts as an easy option which we might or might not choose to implement. There have to be tax cuts—if by tax cuts we mean raising tax thresholds and reducing the burden on the low paid.
I had an example brought to my attention recently of a man who stood to lose money — because he lost rebates, he picked up tax and he lost certain benefits—if he got a pay increase of £10 a week. He was worse off with a pay increase of £10 than he would be if we did not change the tax system. That is why I urge those who talk about forgetting tax cuts to remember who are the principal beneficiaries of raising the thresholds.

Mr. David Winnick: Does not the right hon. Gentleman appreciate that the beneficiaries of


the tax cuts introduced by this Government in the main have been the most prosperous among us? What benefit is it to the low paid if they receive a very small reduction in their income tax liability when, as a result, there is a large increase in indirect taxation, which obviously affects the poorer elements more than those in other sections of the community?

Mr. Parkinson: I suggest that the hon. Gentleman has a word with his hon. Friend the Member for Perry Barr and Mrs. Wise, both of whom made excellent speeches in the Committee on which I served explaining why the indexing of the tax thresholds and the raising of them was vital to the low paid. Unfortunately, I have not the time to develop that theme further.
I refer right hon. and hon. Members to the public expenditure White Paper and the Government's expenditure plans. Listening to some Opposition Members, I got the impression that the Government had not responded to problems, were not aware of the difficulties caused for the unemployed by high unemployment and had remained totally unresponsive and unheeding.
I invite my right hon. and hon. Friends to study the White Paper. Built into next year's expenditure programme, public expenditure in respect of the construction industry is a sum in excess of £16,500 million. That is a huge amount of expenditure with one industry. The idea that the Government are not aware of the problems of the construction industry is not borne out by an examination of the White Paper.
Then we see the Government's expenditure on defence. More than £8·5 billion will be spent with the private engineering sector in the main on the procurement of arms supplies and weaponry and equipment for our forces. Again, a huge demand is being injected by the Government into the engineering sector.

Mr. Donald Stewart: Too much.

Mr. Parkinson: The right hon. Gentleman suggests that it is too much. But the Government are constantly criticised for not spending enough with the engineering and construction industries. I am glad to have his opinion that these sums are considerable.
More than £2,000 million will be spent next year on training programmes. That is a direct response to the problems of the young unemployed. It was Mrs. Shirley Williams who blew the gaff and said that when she was a member of the previous Labour Government she had never been able to raise money on that scale from the Treasury for training programmes, although the need was recognised then. The Government have responded to that need in a very substantial way.
In the industrial sphere, nearly £2,000 million will be spent next year on a variety of industrial supports, and those are different in content from the kind of industrial support that was being given when the Conservatives came to power, which in the main was funding the huge losses of a range of nationalised industries.
The public expenditure programme does not support the accusation made against the Government that they do not recognise the problems of British industry and have not responded to them. The public expenditure programme implies, however, that there is a limit to the amount of public expenditure that can be incurred before we begin to damage the private sector by pushing up interest rates.
I was interested to read the building industry's assessment of its prospects. It sees that the strongest growth in demand in the coming year will come from private sector expenditure on construction, which in itself is extremely interest-sensitive. I urge the right hon. Member for Sparkbrook, in arguing that we should have massive increases in public expenditure, to recognise the impact which that will have on interest rates, which in turn will have an effect on private expenditure — an important component in the economy, although one would not guess that from listening to the debate so far.
The Government's critics claim that there is not sufficient demand in the economy and that it is the Government's responsibility to increase that demand. That is the basic criticism that comes at the Government from those who do not agree with their economic policies. An examination of the facts suggests that the cause of our problems is not shortage of demand. For example, the demand in the retail sector increased by just under £6 billion from the third quarter of 1983 to the third quarter of 1984. Over the same period, imports increased by £3·1 billion. In other words, the demand was there but British products were not meeting it. The demand was being met by products from overseas.
World trade last year increased by the staggering sum of $144 billion. There was increased world demand for expanding trade as well as an increase in internal trade. Our share of world trade is about 5 per cent.
I argue that the cause of our problems lies with our failure to supply the demand that exists and not with a shortage of demand. Injecting additional demand into the economy in the way suggested by the right hon. Member for Sparkbrook is merely a distraction. It is a cruel deception on the unemployed. The people know that there is no easy answer and we should not pretend that our difficulties can be resolved quite quickly by a simple injection of demand.
Why are we not meeting additional demand? That is the central problem that any Government must face. I visited Japan recently and I went to a motor company that I had not visited for six years. In those six years, which include the recession, the company increased its production of motor vehicles by nearly 900,000. That happens to be about the total of British motor production. The company is Japan's second largest motor manufacturer.
I asked the company's leading figures to explain the basic reason for the increased production. They explained that the company has not lost a day's production through strike action in the past 33 years; every British motor company has had a strike within the last six weeks. We have been volunteering to lose production and to fail to meet the demand for motor cars but our rivals are not wasting their time on that sort of divisive behaviour.
I asked the company's representatives about the strike that took place 33 years ago and the lessons to be drawn from it. The lessons were straightforward. It was explained that the company had lost production, the workers had lost wages and the company's rivals had stolen its market. At the end of the day the company had to start again with all the problems that it had had before and the additional ones that had been caused by quickly inflicting enormous damage on itself. The strike seems to be at the heart of our problems. We use stike action as a weapon of first resort while our opponents, or many of them, use the strike as the weapon of last resort.

Mr. Nicholas Winterton: That does not apply to all British industries.

Mr. Parkinson: It does not apply to every industry but it is very typical. The problem lies with our failure to meet demand and not with a shortage of demand.

Mr. Winterton: I am not having that.

Mr. Parkinson: I do not care whether my hon. Friend is or is not. We must concentrate on meeting the demand that exists. There is no shortage of demand, and the more we claim that there is and emphasise it the more we delude ourselves and run away from the central problem of determining how to improve our performance.

Mr. Jim Craigen: I, too, have been to Japan. I was struck by the way in which employers, trade unions and the Japanese Government get together to look after Japan.

Mr. Winterton: And to keep out all foreigners.

Mr. Parkinson: I do not disagree with the hon. Member for Glasgow, Maryhill (Mr. Craigen) about the need for us to work together. That is why I happen to think that the miners' strike is a national disaster. At the end of the day, everyone connected with the mining industry will find himself in the position in which the Japanese motor car company found itself 33 years ago. No one can possibly gain from the miners' strike. It is a maniac's way of resolving differences. We inflict damage on ourselves and consequently benefit our rivals.
I am passionately convinced that unless we find a better way of working together we shall continue to have difficulties and troubles of our own making. I do not see the Government's move to spread ownership as an incidental approach. I do not expect us to be able to emulate the Japanese system of co-operation. We are not the same people and I would not wish us to be. However, we must find a similar answer. We must find a way of working together. My right hon. Friend the Chancellor of the Exchequer was right to say that in every instance where the Government have denationalised an industry, where relations are better and where the bridge between owner and worker has started to be built, industrial performance has improved out of all recognition. I do not regard the Government's push to spread ownership as an incidental part of their economic policy. I see the spread of ownership as the heart of their policies. We must build a bridge between those who work in businesses and those who own them. We must develop an identity of purpose.
Let us not waste our time thinking that fictitous or phoney amounts of additional demand will resolve the problem when they are pumped into the economy. The problem will be resolved only by better performance and that performance will come only when there is a change of attitude. I believe that the chance of that change taking place has been enhanced by the Government's determined efforts to spread ownership and to build the bridge of which I have spoken.

Mr. Richard Wainwright: The right hon. Member for Hertsmere (Mr. Parkinson) has done the Government a great service by reminding them of the current upsurge of serious strikes in important manufacturing industries. By doing so he reminded them that since 1979 they have achieved no lasting structural change in the

complex framework that is used in determining income and rewards. Under the pressure of unemployment, whether created deliberately or not, there has been some respite from exaggerated pay claims and damaging industrial disputes, but the more the Chancellor of the Exchequer proclaims recovery the more shop stewards feel that it is time that they had a share of the rewards for their members. If the Government do not tackle that difficult problem they will be in great trouble, as Governments have been before, on pay.
The right hon. Member for Worthing (Mr. Higgins) has proved to be a most effective reformer of financial procedures in the House. He was correct and relevant when he reminded us today that at this time of the year we should be debating a green Budget involving both revenue and expenditure rather than just an autumn statement. I am worried that the Chancellor might get away with sheltering within the narrow confines of an autumn statement. There is no attempt to update the medium-term financial strategy, and the details of public expenditure changes are bald in the extreme. It is nothing more than a tatty progress report, which is scarcely worthy of our full attention.
This is particularly unfortunate this year, because it is acknowledged in most parts of the House, including the Government Benches, that the Chancellor is a sad man who has lost most of his faith. There are few sorrier figures than a notorious evangelist who in mid-campaign suddenly discovers that his faith has deserted him.
The Chancellor is a bold man and he has done his best. He tried hard in front of the Select Committee to show that although he has had to desert some shrines he has now found others at which to worship. That is not convincing. He has had to abandon the idea to which he clung so long and bravely, that by continued and relentless downward pressure on monetary aggregates and on public sector borrowing, unemployment would be automatically reduced. The revelation that this is not so naturally is a great disappointment to him and to those who thought like him.
It now appears that the Chancellor is increasingly turning his attention to target ranges for interest rates, in which he has become passionately interested, and to the various exchange rates for sterling. The Government will be in trouble unless the Chancellor tells us soon about his new guiding stars and how he intends to follow them.
Another article of the Chancellor's faith is the importance of a downturn in real wages. The Select Committee wanted to give him an opportunity to enlarge on his new doctrine that a downturn in the increase in real wages would have an effect on the rise in unemployment. He took refuge in saying that his chief economic adviser was busy studying the subject and that we may hear about it in the not too distant future. That is small consolation when the whole country is oppressed by ever-rising unemployment and when, despite the Chancellor's attempts to disguise it, the increases in employment are almost entirely among part-time women workers. Good luck to them—they are valuable—but that is no answer to the core problem of ever-rising unemployment. The Government have, in that and other ways, fiddled the official information about total employment.
I was interested in the exchanges about what was not very helpfully described as "income tax cuts", to which the right hon. Member for Hertsmere referred in a telling fashion. I was surprised when, in such a sweeping way, with no reservation, the right hon. Member for


Birmingham, Sparkbrook (Mr. Hattersley) dismissed as a low priority the lifting of the income tax thresholds. At first I thought that the right hon. Gentleman was talking about 2p off the basic rate or, worse, a reduction in the higher rate. If he had meant that I should have understood his sweeping manner. But when the hon. Member for East Lindsey (Mr. Tapsell) urged the Chancellor to forget about any tax cuts and to put all his extra resources into capital projects, the hon. Gentleman was cheered by the Labour segment of the Opposition.
A delicate balance has to be struck, but it is odd, when income tax begins to bite on a married couple at a mere £60 of earnings a week, that the right hon. Member for Sparkbrook should be so dismissive of tax cuts through lifting the thresholds or making a major adjustment in the national insurance threshold. The latter might be a more cost-effective way of relieving the poor of paying for their own benefits. However, it would create frightful poverty traps further up the scale. I find the right hon. Gentleman's sweeping approach deplorable.

Dr. Bray: I also listened carefully to my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley). I understood that he was saying that any changes in income tax have a far smaller effect on unemployment than direct public expenditure. Any raising of the tax threshold can be balanced by increases in the higher rate of tax to ensure that the lower paid, but not the higher paid, are indexed.

Mr. Wainwright: I do not disagree with the words that the hon. Member for Motherwell, South (Dr. Bray) uses, but he will be the first to agree that this was not the argument used by the right hon. Member for Sparkbrook. I hope that the hon. Member for Birmingham, Hodge Hill, (Mr. Davis) will clarify the official Labour position.
I warmly endorse the suggestion that better information be placed in front of the Cabinet when public expenditure plans are prepared for the autumn statement. The Chancellor did his best to assure us that this is taken care of and that, up to the point where a political judgment has to be made, the present procedures fully cover the demands by reformers. He was not convincing because he is unable to claim that the original decision on the Foreign Office cut this year was agreed in detail in Cabinet. Everyone knows that it did not go to Cabinet originally. He was not able to claim that the original proposals by the Secretary of State for Education and Science for student grant cuts went to Cabinet. The House should consider how to better these procedures.
It is almost self-evident that most of the crucial domestic expenditures, especially those with large social repercussions, have heavy elements of overlap between one spending Department and others. These elements are so obvious that I should perhaps apologise for giving some instances to the House. For the record, I should like to mention the problem that most of us face at one time or another in our families — accommodation for elderly people. The provision of accommodation at the places where people are living—enabling them to stay in what they regard as their home—is a matter for the Minister for Housing and Construction, because it entails the construction of more sheltered housing and the provision of old people's housing schemes. But if it is believed that, to provide better care for those people, they should be

under closer medical supervision and should go into a type of elderly persons' communal accommodation, or even geriatric accommodation, that is a matter for the Department of Health and Social Security. Inland Revenue has an interest also, because the tax treatment of the elderly is highly relevant to this matter.
There is no evidence that such overlaps — hon. Members will know of dozens of examples of similar overlaps in important matters — are properly treated. When I served on the rather notorious Sub-Committee of the Treasury and Civil Service Select Committee, which examined taxation and benefits, senior officials from the Treasury and DHSS admitted frankly that there was little mutual consultation about the interaction between taxation and social security benefits. For once, The Times was right in saying in its leading article on star chambers that the trouble with star chambers is that they have
no basis of comparison of the economic or social merits of the output of different departments, because there is no part of government whose task it is to provide such an evaluation.
I believe that there should be machinery for carrying out that task. The star chamber method where matters are fought out among Ministers sitting in twos and threes, which sometimes ends with blood on the carpet, threatened resignations and all the rest of it, is no way to settle these important matters in an advanced country.

Mr. Leigh: Will the hon. Gentleman give way?

Mr. Wainwright: This must be the last occasion on which I give way or I shall be in trouble with the Chair.

Mr. Leigh: The hon. Gentleman cannot be allowed to get away with the Liberal economic policy, which is all things to all men. The hon. Gentleman rightly attacked the iniquities of levying taxes on people who earn just £60 a week. How does the hon. Gentleman intend paying for the Liberal inflationary and reflationary policy programme—by higher taxes or high borrowing?

Mr. Wainwright: There is no secret about that. Three years ago, we published a compendious booklet called "Back to Work", which made it clear that, over three years, we wanted an approximate addition of £9 billion to the public sector borrowing requirment. That does not mean a crude £3 billion a year—it means building up the PSBR so that over three years there is an additional £9 billion.
I must record the alliance's bitter disappointment at the lack of reference in the autumn statement to unemployment measures. There was no mention of the task of matching the tens of thousands of people who could be employed with the public works crying out to be done. Worse still— I hope this point appeals to those hon. Members who are accountants — nothing in the document shows any Government awareness of their failure to keep up with depreciation and obsolescence of public assets. That criticism applies as much to Labour Administrations as to the Conservative Administration.
The public is painfully aware that the yearly depreciation of our public assets has not been attended to and that their conditions have become much worse. It is no answer to cut the external financing limits of important public services. I do not think that hon. Members have fully appreciated, for instance, the fact that the autumn statement shows that the return the Government expect from the water industry will almost double during the next three years. If we were to tell any business, however


brilliantly managed and successful, that the shareholders expect the return to be doubled within three years, we would be asking a great deal and would often—not always—be accused of greed and of asking for far too much. It is far too much to ask, for example, the water industry —whose assets are clearly clapped-out and which cannot deliver more than about 70 per cent. of the water gathered, into the pipes and bathrooms of the people who pay for it—to be used as an unofficial tax-gatherer. To ask such industries to be under-the-counter tax-gatherers when they are experiencing distressing physical conditions would be a breach of stewardship.
We on the alliance Benches have no time for this autumn statement. We do not believe that it is matched to the needs of the country. If it foreshadows the Budget we are to expect, the sooner the Government pack up, the better.

Mr. Deputy Speaker (Mr. Paul Dean): Order. The 10 minute limit on speeches is now in operation. I appeal for the co-operation of hon. Members.

Mr. Nigel Forman: This debate, which seems to occur every year, gives us a useful opportunity to consider the development of the economy and to question some of the assumptions underlying the Treasury's forecasts. Clearly, the figures on the growth of output, the reduction in inflation, the recoveries in investment, profits and productivity and the buoyancy of exports are all on the positive side and are to be warmly welcomed. They are moves in the right direction.
As my right hon. Friend the Chancellor said earlier, a number of serious worries remain — notably, the problem of mass unemployment with more than 3 million registered unemployed and the risk that the Treasury assumption on unemployment for the next two years or so may well turn out to be optimistic. Equally, there is obviously a clear connection with the difficulty of controlling public spending intelligently, as the Select Committee pointed out in its report, and there are worries about the shortcomings in the manner in which the Government address themselves to the ordering of priorities which is implicit in that public spending.
Without sufficient overall growth in the economy during the coming period, and bearing in mind the difficulties of controlling public spending in aggregate and disaggregate forms and the threat that unit costs may start to increase again with earnings beginning to take off in an alarming way, the prospects held out by the Chancellor for substantial fiscal relief or improved international competitiveness are not as good as some of us would wish.
Further recovery of output will be delayed as long as this dreadful miners' strike goes on. I strongly agree with the remarks by hon. Members about the need for Scargillism to be defeated in the interests of not only working miners but the entire economy. The inflation prospect could be prejudiced again by a substantial real increase in earnings and the possibility of a continued fall in the value of the pound in relation to other currencies. Investment recovery is vulnerable if profits are not sustained. Everything the Government can do must be done to expand the available market domestically and internationally and to ensure that we have realistic pay settlements.
The continued export recovery on which we heavily depend will require energetic efforts in the EEC and other

international gatherings to ensure that we tackle the issue of non-tariff barriers, which must still concern my right hon. and learned Friend the Chief Secretary, since he was formerly the Minister for Trade. But underlying all those problems is the very tricky nexus between productivity and unemployment. That seems to be the "Catch-22" of our economy at the moment.
I think that the whole House would agree that we need productivity increases at least as great as output increases if we are to remain competitive in a very tight world economy. But that inevitably will tend to increase unemployment, which in turn will increase public spending, which in turn will make it harder to boost the private sector with the lower taxes and lower borrowing that we should like to see.
On the other hand, if we were to go in the direction of the so-called alternative economic strategy espoused by Labour members we might see a decline in the rate of productivity increase over the years ahead, and perhaps unemployment falling for technical reasons as a result—but, of course, at a very great price in terms of diminished international competitiveness. If the Labour party were ever to come to power, it would be driven into a siege economy, whatever weasel words it might use in a future manifesto.
The only sensible choice for Britain is to work for a higher-output, higher-productivity economy and then to use a good part of the extra income and wealth so created to alleviate and help reduce unemployment, which is the principal adverse consequence not only of an economy in decline but also, paradoxically, of a successful economy that is experiencing a recovery based on high technology and strong competition from overseas. In these circumstances, it behoves us all to give some indication of what we think the Government should be doing in addition to the sound policies upon which their programme is already based. I have not the time this evening to go into the large range of micro-economic, supply-side policies that I and several of my hon. Friends favour in that regard. I am sure that there will be other opportunities in the House over the coming months to talk about that.
I should like to concentrate briefly on next year's Budget, since it seems to me that this is an opportune moment at which to put down a few markers about the things that many of us would like to see. I want to see that Budget framed with a top priority for employment creation in as many sensible and effective ways as we can possibly manage.
We should seriously consider reducing the non-pay costs of employing more workers, because these are now very significant. They are not necessarily as significant as wage costs, but they are a factor that was very much in mind when the EC Commission was writing its excellent report recently. We should do so by cutting the employers' national insurance contributions, possibly to 9 per cent.
Secondly, we should raise the lower earnings limit of national insurance contributions to £60 a week, which is only the sort of level at which most people enter income tax for the first time. That would help greatly to alleviate the problem about which many hon. Members have spoken—that of the low paid in work.
Thirdly, I should like to mention a longer term objective which could be started in the Budget and taken forward later. We need to synchronise national insurance rates with income tax rates as far as we can, and in doing so to raise the upper limit of national insurance


contributions. From the Treasury's point of view, that would have the desirable effect of bringing in some extra revenue which could be used partly to offset the costs of some of the other measures that I have mentioned.
My fourth point is not so much in the sphere of the Treasury, but it underlines the point that the Government as a whole must make a co-ordinated and trans-departmental response to deal with the problems of unemployment. We should put the enterprise allowance on a demand-led basis. It is very nearly there now, because the Government, under continual pressure from their Back Benchers, are responding positively. But we should make it a formal position in which anyone who could usefully take advantage of this excellent scheme should be able to do so with the minimum of delay. My only caveat is that those who are going into the scheme need to benefit from the best possible advice as to which sectors to go into and in what concentration. I have already had some rather awkward cases drawn to my attention. For example, in some parts of the country there may be more shoe repairers than can be justified by local market conditions. Clearly, a little steering and guidance are required.
Finally, I should like to see the community programme expanded. It is now helping about 126,000 people at a net cost of about £1,500 per place. That is a fairly cheap and effective way of assisting people, many of whom have previously been unemployed for a long time. If we can do that—and do it in a way that also injects a greater training element into the programme — we shall be serving those people as well as can possibly be expected in tight economic circumstances.
I realise that the overall scale of any economic stimulus which might be implied in my remarks is not all that significant in itself, but it might help to nudge the economy in the right direction in regard to job creation. Above all, it will make an important psychological contribution to the needs of the many people in Britain who may feel that they have been forgotten and that their interests are not uppermost in Ministers' minds. Therefore, I was delighted to hear my right hon. Friend the Chancellor of the Exchequer say this afternoon that the tackling of unemployment is a priority task of the Government.
I hope very much that whether my right hon. Friend does good by stealth, through something called fiscal drift, or whether he does good openly, which I should like to see him do, he will address himself principally to bringing forward an employment-creating Budget—and, indeed, a series of such Budgets for the rest of this Parliament.

Mr. David Winnick: The debate on the autumn statement must be seen against the background of mass unemployment. I have a list of the constituencies where male unemployment is very high. In some places male unemployment is near to 40 per cent. In my own constituency in the west midlands it is 22·5 per cent. My constituency is not alone in the region in having such a large amount of joblessness, as the list shows. The latest overall figures show that in the west midlands the unemployment rate is 15·3 per cent., and that in my own travel-to-work area it is 17·4 per cent.
In looking through my files in preparing for today's debate, I saw from the lists that were sent from the

appropriate jobcentres that in March 1980, in my travel-to-work area, unemployment was 6·7 per cent., that in the west midlands it was 5·9 per cent., and that nationally at the same date it was 6 per cent. When the Government first took office, unemployment in the west midlands stood at 5·1 per cent.—the same in fact as in my own travel-to-work area.
On Tuesday evening there was what was described as a private meeting of Tory MPs upstairs, to deal with student grants and parental contributions. It seems that 250 Conservative members attended the meeting. It was apparently a very noisy meeting. From downstairs, I understand, one could hear the banging on desks. Whenever anyone criticised the Government, there was a loud cheer. The one or two brave spirits who stood up to defend the Government were apparently heard in total silence. If the same pressure were to be applied by Conservative MPs to their Government over unemployment—

Mr. Nicholas Winterton: It is.

Mr. Winnick: —it would be interesting to see the result. Suppose that, at a meeting of about 250 Conservative MPs, the Prime Minister and the Chancellor of the Exchequer were told, "We shall not support your policies, which are causing unemployment and mass misery throughout the country. We shall not support you in the Chamber. We want a change of policy." I suggest that that type of pressure could well bring about a modification of economic and social policies, just as the meeting on Tuesday produced a statement yesterday from the Secretary of State for Education and Science.
There is an urgent need for investment in public services and facilities. That is the most important way to create jobs. My right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) in opening for the Opposition, spoke of the cuts in housing in the next financial year. There should be a substantial increase instead. There is certainly no justification for any cuts. Reference has been made to the letter sent to Members by the Building Employers Confederation which states that spending next year is likely to be between 15 per cent. and 25 per cent. less than in the current year. The confederation also believes, with considerable justification, that public housing starts will be 14 per cent. down and private housing grants 17 per cent. lower and that there will be a 6 per cent. reduction in improvements to public sector housing stocks.
Since 1979–80, Government finance for public sector housing has decreased by about 60 per cent. in real terms. If there were an increase instead of a cut, two results would follow. First, many people in the dole queue could go back to work in the construction industry for which they were trained. Secondly, it would produce the improvements and building so urgently required in public sector housing in my constituency and in so many others. In my borough, no contracts at all have been entered into for council house building since 1979. Undertaking that urgently needed housing work would be a very effective way both of reducing unemployment and of providing urgently needed improvements and new housing.
As a result of changes made by the Treasury and the DHSS, some pensioners will lose £1 of their supplementary benefit heating addition. They are, of course, the poorest pensioners. If they were not, they


would not be receiving supplementary benefit in the first place. Yet, earlier this week, when British Telecom was sold off at £1·3 billion less than the market price, the financial institutions made enormous gains. The difference in the Government's treatment of the poorest and the most prosperous elements in society is highlighted by that comparison. There is no possible justification for taking £1 from people on very limited incomes who already suffer great hardship in trying to keep warm in winter.
The former Secretary of State for Trade and Industry, the right hon. Member for Hertsmere (Mr. Parkinson) argued in favour of tax cuts, but there is no purpose in cuts which in the main would benefit the well off if the result is an increase in indirect taxation, which bears most heavily on people with low incomes. I am extremely concerned about the possibility of VAT being imposed on certain zero-rated items such as children's footwear. The whole House should be extremely worried about that. If such items become subject to VAT, how long will it be before food is taxed as well?
I also strongly oppose the imposition of VAT on books, newspapers and periodicals. A tax on books is a tax on knowledge. There is no justification for that, and it should be resisted. As for newspapers and magazines, it is interesting to note that in 1977 the Royal Commission on the press recommended that any proposal to end zero-rating should be strongly opposed because of the harm that it would do. I understand that there is no pressure from the European Commission on the British Government to alter the zero-rating of newspapers. Moreover, if VAT were imposed on the cover price it would undoubtedly discriminate against papers for which one pays as opposed to the free newspaper.
Therefore, I agree with the industry that VAT on newpapers would raise issues far greater than purely economic considerations. As a Labour Member, I must concede that most national and provincial newspapers are not on our side—that perhaps is an understatement—but that does not alter the argument that the imposition of VAT would be a retrograde measure and should be strongly opposed.
As in all Budget and autumn statement debates, the Government have sought to minimise what they can do to end mass unemployment. They virtually wash their hands of the matter, saying that there is little that they can do, that it is not for the Government to act, and so on. We utterly reject such excuses. We believe that the unemployment created in the past five years has been principally due to the Government's economic and social policies. These policies are largely to blame for the misery of millions of families in this country. We know only too well what happens to people who, once made unemployed, cannot find alternative work.
I believe that our amendment is entirely justified. I only hope that Conservative Members who say that they are as concerned as we are about unemployment will have the courage to join us in the Division Lobby.

Mr. John Townend: I have been a consistent supporter of the Government's original policy to reduce public spending. I have also been a consistent critic of their failure to achieve that objective. I was therefore greatly saddened by the change to the revised objective of containing public spending.
To achieve that revised objective, the Government set great store upon keeping the planning totals in line with the expenditure White Paper. Year by year, that involve increasing use of what we in the Select Committee on the Treasury and Civil Service call "creative accounting". One of the most important aspects of this is that the budgeted amount for asset sales is increased, thus keeping the planning total in line. Cmnd. 879, published in 1983, shows a planning total for 1985–86 of £132 billion — exactly the same figure as this autumn statement. At that time, however, asset sales were budgeted at £500 million. They are now budgeted at £2·5 billion. The increase of £2 billion has all gone in increased departmental spending. So much for the Opposition's claims that the Government are viciously cutting spending.
The planning totals also do not include interest payments, which are rising this year and are due to rise by a further £1 billion next year. As I said in the debate on the autumn statement last year, although my right hon. and learned Friend the Chancellor has my sympathy and support, year by year he is losing the battle with the spending Departments. The biggest culprit is the DHSS, which this year is spending £2 billion more than was scheduled in the 1983 White Paper. I welcome the setting up of the review boards but I am perturbed that a recent report suggests that Ministers have said that any savings achieved will be used to increase benefits rather than to reduce taxation for the low paid.
I am delighted that this year the Department will at last look at the appalling scandal of the board and lodging allowance. I hope that the Minister will be sufficiently severe to stop the financial incentives that encourage young people to leave the parental home. The cost of housing benefit, which doubled last year, has been greater than anyone anticipated. Many people in receipt of the benefit, which costs the country £2 billion, pay income tax.
We should also examine the amount paid in social security to striking miners and any other strikers. Is it right that taxpayers should subsidise people who are costing the country so much money? Should we pay social security to young people who turn down the chance of a place on the youth training scheme?
The current year's expenditure is running ahead of the budget by about £4·25 billion. About £2·75 billion will be met from the contingency reserve, leaving an outturn of £1·5 billion more than planned. We are told that it has been caused principally by the coal strike. Surely a contingency reserve is meant for unforeseen circumstances such as a coal strike. Based on this year's experience, was my right hon. Friend wise to reduce the contingency reserve in the autumn statement by £750 million?
All hon. Members accept that unemployment is the greatest problem facing our country. I do not believe that this terrible situation can be dealt with by increasing public spending. I agree with the Chancellor, who said to the Select Committee:
The level of unemployment would have been improved if real wages had grown at a less rapid pace.
The experience of the United States during the past 10 years supports that view. Between 1975 and 1984, 14 million new jobs were created and real wages in manufacturing industry fell by 3·5 per cent. In the United Kingdom, even during the height of the recession, wages


continued to rise, —during the past 10 years they rose by 13 per cent. — and the number of jobs fell by 1 million.
In the autumn statement the Government seek to restrict pay increases for public sector workers next year by 3 per cent. If the Government are serious about letting market forces work in the labour market, as they do in the United States of America, and about removing rigidities in the market; they should take action. Some Select Committee members were disappointed when, in answer to a question, the Chancellor said that he and his colleagues
spoke only in general terms about measures to reduce rigidities in the labour market and that no firm conclusion had been reached about these.
Is it not nonsense that, while the Government try to limit wage increases in the public sector to 3 per cent., employers of several million employees in the private sector must increase their wages year by year by more than the rate of inflation at the diktat of wages councils, which are set up under Government legislation? As the time is approaching when the Government, under their international obligations, can give notice to abolish the wages councils, they should give that notice as quickly as possible.
Further restrictions which affect the free operation of the labour market and which should be considered seriously include the national dock labour scheme. It has already destroyed Liverpool, is well on the way to destroying my home city of Hull as a port, and is doing its best to destroy Southampton. We must re-examine the Employment Protection Act 1975, which still puts the fear of God into many small employers. It is a disincentive to taking on more staff. The Government must examine the Equal Opportunities Commission, which is a bigger nonsense than before since the recent decision that a lady who works in the canteen should be paid the same rate as a skilled shipyard worker. We should look at the Commission for Racial Equality, the code of practice of which is full of bureaucratic nonsense.

Ms. Clare Short: The hon. Gentleman is a nasty man.

Mr. Townend: My next remarks will sound even nastier. We can never consider unemployment without reminding Opposition Members that if the Labour Government had had stricter immigration controls we would not have the problems that we have today. In the south-east we have 250,000 foreign workers, mainly working in the catering, hotel and service industries. Why are those jobs not filled by our own unemployed people?

Ms. Short: Join the National Front.

Mr. Townend: The reason is that many young people are not prepared to accept the wages, terms and conditions for those jobs. Perhaps we pay them too well on social security, especially in areas such as the south-east, where jobs are available. The Government should consider dealing with this problem from the public expenditure point of view and with a view to getting people back to work.
There is a great deal that is encouraging in the autumn statement. Inflation is decreasing, productivity is increasing and the rate of growth is increasing for the fourth successive year. I plead with the Chancellor to open up the labour market, to remove the rigidities and to make

the mobility of labour possible by dealing with the Rent Acts. He should take out his knife and slit away the legislation and bureaucracy, which is killing jobs.

Mr. Jim Craigen: If the hon. Member for Bridlington (Mr. Townend) sees anything encouraging in the autumn statement, he needs a pair of spectacles. He has not changed his penny-pinching ways since we served on the Select Committee on Employment. Some of the folk whose pay and benefits he wishes to cut would have been glad to receive the consultancy fees paid in connection with the sale of British Telecom. Massive public expenditure was devoted to that, but I shall come to that matter later.
The Chancellor referred to vision. He has no clear idea where the United Kingdom is going, far less any idea of the growing lack of social cohesion that accompanies his policies. The autumn statement is probably becoming more important than the budget in determining the living standards of the many people whom we represent. The right hon. Member for Worthing (Mr. Higgins), the Chairman of the Treasury Select Committee, was right to talk about some of the problems that arise when one looks at matters in compartments. There is a growing body of opinion in the Conservative party about the cost of Trident and the extent to which that expensive project is pushing out other priorities within the defence budget, let alone extinguishing some valuable social projects and priorities.
It is outrageous that the housing benefit system was altered so that many young people were encouraged to leave home to get a better rate of benefit in a lodging house. The Secretary of State for Social Services is penny-pinching and wants to change the lodging house benefit arrangement to put the young people out on the street. The Minster should not underestimate the social problems that have emerged in our cities. There is growing homelessness and unemployment among young people, and there are more problems of drug addiction. We must address ourselves to those serious political issues.
It is all very well to look at one side of public expenditure and decide to cut housing benefit, but the present system is open-ended regarding income tax relief for home purchase. The Treasury effectively loses £3 billion through income tax relief. About £500 million goes to people who live in big houses and happen to pay the highest rates of income tax. There is no housing need relationship there; it is a house purchase relationship. That may well have to be looked at in terms of equity and parity of treatment.
The right hon. Member for Hertsmere (Mr. Parkinson) mentioned the construction industry when he was talking about the importance of the private sector. The turnover of many building firms depends upon public contracts. They are building, rehabilitating, maintaining and repairing properties, and the Minister should not overlook the interrelationship between the public and private sector. The one depends upon the other. I believe in successful private and successful public enterprise, but I object to the way in which the Chancellor's policies do down both. The Chancellor is shaking his head, but that is a fact. Many private companies have found it extremely difficult to maintain their profitability while he has been Chancellor.
Last night, my Scottish colleagues and I saw a lobby from the housing asssociations in Glasgow and the west


of Scotland, because the people involved in community-based housing associations are worried about what will happen with the lack of funding and resources to tackle the problem of sub-tolerable standards, let alone engage in the new build projects that we should like to see.
The hon. Member for Carshalton and Wallington (Mr. Forman) said that he hoped that the Chancellor's next Budget would create employment. We all hope that, but we did not see it in the previous Budget, far less in the autumn statement. It behoves the Chancellor to realise the implications of some of the decisions that are being taken in Departments.
Value added tax has been mentioned. The Chancellor is presently trawling the highways and byways seeking extra resources to pay for the own resources contribution to the EEC. The Government's approach is inconsistent. The Prime Minister asks manufacturers why they produce goods that people do not want. However, it would appear that we encourage agriculture within the European Community to produce what consumers are incapable of consuming at a great cost to national Treasuries because we have to pay vast amounts to store the produce and to keep the warehouses busy.
There is a suggestion that children's clothing and footwear are to be subjected to VAT. Local education authorities face problems at present. They have to hand out clothing grants to kids who cannot go to school because they are not properly attired. That is serious. I hope that that suggestion will be excluded from any trawling that the Chancellor is doing while looking for extra sources of indirect taxation.
When we talk about the spread of ownership, I hope that we realise the responsibility of management, because when public assets are being sold—often at a real loss —it is strange to think that one is bringing a few people into the ownership of assets that we all owned before they were floated off at public expense.
I wonder how much longer this country can afford the present Chancellor and his policies. We should be in "never-never land" were it not for the fact that we have singularly benefited from North sea oil and that the Chancellor is presently receiving some cash on the side from the sale of public assets. What will happen when the last drop of oil goes or when the last asset—the Crown jewels have not been sold yet—goes?
The Government have become corrupted by their own power. They have become oblivious to their mismanagement and the shortcomings of their policy. The sooner they change their ways, or better still go, the sooner this country will be better off.

Mr. David Howell: We had a robust exposition of the Government's economic policy from my right hon. Friend the Chancellor. We also had an excellent speech from my right hon. Friend the Member for Hertsmere (Mr. Parkinson) in defence of Government policy, with most, if not all, of which I agree. The debate has brought out the point that the Government are facing two dangers—problems which they need to examine carefully to see how they can get round them if there is to be a successful development of the economic policy that my right hon. Friend the Chancellor is rightly trying to put forward.
The first of the two problems is the strategy of using tax cuts as a means of reducing unemployment. It is a

strategy in which I believe, but I do not think that it is getting across. It has not reached the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), nor do I think that it has reached a number of my hon. Friends. The difficulty is that we are dealing with a completely new labour market and entirely different conditions of unemployment from those of the 1930s. It is an unfamiliar idea to many people that jobs can be created through tax cuts. Hon. Members have almost expressed bewilderment, as if they thought that tax cuts and employment were alternatives. If hon. Members study the labour market as it is developing, with the new conditions that we face, they will see that tax reductions are the most effective engine of job creation.
The second problem is that the mechanism for settling public expenditure priorities appears to be in danger of falling into some disorder and decay. I do not have time within the 10-minute rule to discuss that at any great length, but in any case, my right hon. Friend the Member for Worthing (Mr. Higgins) in his excellent chairmanship of the Select Committee on the Treasury and Civil Service has made an excellent start, and the Committee has produced a good report which raises a number of questions.
I say to my right hon. Friend the Member for Worthing—I echo what my right hon. Friend the Chancellor said—that there is no trouble-free or political agony-free method of settling the priorities for public expenditure between Departments or even between programmes within Departments. President Reagan, for one, is clearly finding that out now as he struggles with his budget deficit.
But I should like to think that the battle could be more between policies and less between Departments. For what it is worth, the intention of those of us who drafted the White Paper setting up the Central Policy Review Staff in 1970 was to create a mechanism which would not solve the political problems but would at least set out the choices between policies rather more clearly for central Departments and the Prime Minister than in the past. It was not our intention that the CPRS should become a think tank. It did, however, first become labelled that and then became the Think Tank. But we saw it as a mechanism precisely for trying to set out some of the expenditure choices across Departments rather more effectively than had been the case.
We are now being corralled into a greater emphasis on the famous bilaterals between Departments, and those plainly lead to dangers. It may not necessarily be right that if a Department's expenditure on one programme increases another of its programmes should be cut.
That may be Treasury logic, and a rather effective way of bringing down our bloated public spending. It has been used over the years but it is not the pattern of real life and it leads to the difficulties that we have experienced recently.
I turn now to the prime issue, around which much of the debate has revolved: tax cuts versus spending. I hope that we can put aside the question of who believes or does not believe in the importance of reducing unemployment. There is an overwhelming commitment by responsible persons in public affairs to the reduction of unemployment. The issue is how effectively and speedily it can be brought about. The right hon. Member for Sparkbrook put forward a thesis in which he clearly believes: that there is a choice between tax cuts and unemployment. I believe that to be a completely false choice.
The right hon. Gentleman spoke of a number of economic models which have clearly influenced him. He has obviously been talking in detail to economists. If he is interested in economic models, there are plenty of economic models which put the opposite view with great vigour. I commend them to the right hon. Member for Sparkbrook if he wants to get a better grip on views about economic policy. The Liverpool economic models—Professor Minford's group—argue that for every £100 million used in tax cuts, 10,000 jobs would be created, or that for every £1 billion used in tax cuts 10 times that number of jobs would be created. He says that 5,000 jobs would be created by cutting the standard rate of income tax and that 8,000 jobs would be created by cutting the national insurance contribution.
The Warwick institute of employment research says that £1 billion in tax cuts would produce 203,000 jobs after four years, whereas it argues that if one is dealing with increases in public expenditure the figures would be very much smaller.
There is another argument which the right hon. Member for Sparkbrook ought to take on board. When he says that increases in public expenditure are the way by which to create jobs he is not reflecting the proper range of economic thinking. He ought to understand that the modern labour market is quite different from anything that we have had in the past. It is not comparable with the 1930s. We ought to realise that tax reductions and reductions in the NIC are a powerful engine of job creation.
I do not rule out the suggestion that there should be increased capital spending by the Government, but I do not believe that that will be the main engine of job creation. The right hon. Member for Sparkbrook has not understood the nature of the modern construction industry and its very limited job creation capacities. Certainly, a great deal needs to be done for the infrastructure of this country, for a number of social reasons. By far the best report on the subject has been published by the Policy Studies Institute. It is entitled "Building the Infrastructure". I must declare an interest because I am involved with the Policy Studies Institute. It says in its report that it looks forward to a 10 year spending programme of about £3·3 billion on the infrastructure—£330 million a year. It says that the public spending element—the pump priming element via the urban programme—would need to be only one third and that the other two thirds each year of the £330 million could be induced from the private sector. The Government should include that point in their thinking.
As for the scope of the tax cuts, which are the real engine of job creation and the quickest and most effective way to restore the kind of employment in the new job market which is emerging—in particular the far better range of part-time and flexi-time employment that people are demanding nowadays—room is available not only from the £1·5 billion about which my right hon. Friend has spoken. He has more room than that. I suspect that there will be some easing room from the revenues from dollar oil prices, although I realise that that is a gamble. But I question whether adherence next year to the £7 billion PSBR is necessary.
The financial markets are not interested in precise Pstatistical figures each year. They are interested in being assured that in the medium term, over four or five years,

financial, monetary and fiscal policies will coincide and be in harmony. If the financial markets saw that the Chancellor was accelerating his tax cuts and bringing forward £1 billion next year on top of the £1·5 billion, with the aim of getting on top of job creation, as I know it would do, I do not believe that the financial markets would worry about it or put him under any pressure about interest rates. So a £2·5 billion move in the Budget next spring would be a good start to the tax-cutting, job-creating strategy which is necessary to create the new jobs which are being demanded in the wholly different conditions we now face. The old labour market of the past no longer exists. I beg hon. Members opposite to understand that we are facing new conditions.
What incentives should take priority within the £2·5 billion? Good arguments have been put forward about the need for tax reductions on lower wages. I do not understand why the Labour party wants to dissociate itself from the cause of lifting the intolerable tax burden on those first going into jobs who find that they pay immediately 39p in NIC and income tax out of the first pound that they earn. That cannot be right. We must have the support of a modern, understanding Labour party. It must not turn its face against those sort of tax cuts for people in lower income groups who are in real need.
The second kind of tax cuts that I wish to see are those which my right hon. Friend the Chancellor mentioned in his speech. I refer to the need for wider ownership. This is the theme which for 10 years some of us have been pleading for in the Conservative party. It is a theme which all politicians who are opposed to old-fashioned state Socialism should embrace. This is the path to more jobs, more employment and a fairer society than anything the welfare state has been able to develop. There ought to be a massive increase in the support of for wider personal ownership. I should like 1 million more council houses to be sold. I should like there to be more specific and positive tax incentives for share ownership, following the success of BT. I should like there to be far fewer barriers to setting up new businesses. This could be done. It would lead towards employment in a way that none of the proposals could achieve which have been put forward, in particular by members of the Labour party who keep looking back to the past. Labour Members must understand the nature of the new labour market and the fact that it is through tax deductions that we shall create the jobs that we need.

Mr. Mark Fisher: The right hon. Member for Guildford (Mr. Howell) and his right hon. Friend the Member for Hertsmere, (Mr. Parkinson) will not find many people on the Labour side of the House who agree with them, either in their detail or their priorities. However, they recognise the problems that face this country and I am pleased that at least it is possible to have a serious debate with them about priorities, speed and the method of tackling unemployment. We recognise and welcome this commitment to tackling unemployment, even if we cannot agree entirely on the details. However, I am sure that the right hon. Gentleman will readily admit that that kind of recognition from him was totally lacking in the Chancellor's own speech.
The Chancellor does not recognise those problems. He lives in a different world. He referred to four years of steady economic growth. I do not know why he believes that. The claims which he made were not credible. He


claims that the Government have a firm grip on public expenditure. If a firm grip on public expenditure means such expenditure going up by £1·5 billion to £128 billion and increasing by 6·5 per cent. last year, is that really the firm grip that is needed? It is not even being held constant in real terms.
The Chancellor also spoke about inflation. He claimed that better progress had been made on inflation. However, table 1.3 on page 9 of his autumn statement shows that, except for housing, inflation is going up. It is only because of a radical drop in housing inflation that the Chancellor can show a constant inflation figure.
When the Select Committee tackled the Chancellor on this point and asked him what interest rate assumptions allowed him to show that housing inflation was corning rapidly down, he was unable to give us any evidence or facts. It is hope and assertion rather than anything else. The Chancellor is whistling in the dark to keep up his courage. Hon. Members on both sides of the House cannot believe what he says. Nor should they, because in the same debate last year the Chancellor said that unemployment was levelling off. That prediction was wrong. Many of the things that the Chancellor has said today are wrong. His track record is not good. The House ought to recognise that in the autumn statement the Chancellor has juggled with the figures to create the impression of a Chancellor in control of his own economic policy. But the real world is very different.
Let us look at some of the figures on the expenditure side. The right hon. Member for Guildford referred to a commitment to bring down unemployment, but in the autumn statement the Government accepted that unemployment will stay "stable" at 3 million. It is already at 3·25 million and shows no sign of coming down. If it is to stay stable at that level, the Government should have included an extra £370 million in their planning total.
The Government predict a 3 per cent. cut in local authority spending in real terms. No hon. Member can seriously believe that that will happen. Even if the Government achieve a freeze through their draconian targets and penalties, which is unlikely, they would still have to allow an extra £1,000 million in their planning total.
The Government say that public sector pay will be held to a 3 per cent. increase. Again, no one can seriously believe that. Most ridiculous of all, the Government assume that the miners' strike will be over by Christmas, in three weeks' time. No one believes that either.
The figures on the other side of the equation are equally unrealistic. An extra £500 million has been included for asset sales. The Chancellor of the Exchequer gave no evidence or statistics to the Select Committee to justify that assumption. Council house sales are assumed to be £400 million. The Chancellor was also unable to justify that figure to the Select Committee, and the 1983 sales figures were down by 35 per cent. It beggars belief how the Chancellor can assume another £400 million of receipts.
No one can believe the figures in the autumn statement and Conservative Members ought to recognise that they are phoney. The Select Committee refers to "systematic distortions" in the planning total. That is a polite way of saying that the Chancellor is misleading himself and the House on the contingency and the planning totals, both of which are inaccurate.
Not all the Chancellor's forecasts and assumptions will be wrong. Some will probably be correct, but it is undeniable that he will almost certainly be wrong on some. He has taken the most optimistic view of every fact. They will not coincide. The Chancellor is living in a fantasy world.
The Chancellor is especially living in a fantasy world over North sea oil. If there is one characteristic of the autumn statement, it is that it depends on the Chancellor's view of what will happen to the exchange rate and with North sea oil. He has included £2·5 billion extra revenue for this year. He assumes that the sterling-dollar exchange rate will remain at its present weak level. As the right hon. Member for Worthing (Mr. Higgins) said in his excellent speech, that is a dangerous and unsafe—to say the least—approach. It is a complex and hazardous area in which to speculate and for our economic policy and the autumn statement to depend on the sterling-dollar exchange rate, particularly when the Government, on their own admission, have no target for that exchange rate, is an unsafe way of presenting the Government's economic strategy to the House and the outside world. I urge Conservative Members to look at the figures in the autumn statement and to recognise that they are being asked to accept figures that are, at best, highly optimistic, and often phoney.
If the Chancellor is satisfied with the figures, he is deluding himself. Different things are happening in the real world. Public borrowing and public spending are up. Government expenditure is up, because of increases in demand-led programmes, such as unemployment and housing benefits. Wages are running 3 or 4 per cent. above prices. The Chancellor's aspirations for parity between wages and prices will not be realised.
There are genuine demands, which the autumn statement does not face up to. Our infrastructure is collapsing and we have an older population and vastly increasing costs for the Health Service, social services, pensions and housing.
There is demand for more spending on skills, education and better services. Those are not selfish or fantasy demands. We must meet those demands if we are to respond to the challenges facing our industry.
Other problems are raised by the decline in our manufacturing industry. The right hon. Member for Hertsmere touched on that matter. The balance of trade in manufacturing has been sliding away from us in the past 18 months. The autumn statement does not address that fact.
Investment in infrastructure is inadequate and revenue from the North sea has peaked and will decline. The autumn statement does not face up to that problem. I beg Conservative Members to recognise the weakness of the autumn statement. When they see how unsafe and unsure it is, they will turn on the Chancellor and then it will be possible for us to have the necessary serious debate, which has begun in simple terms, on these matters.
Despite the fact that the Chancellor pretends that his figures add up and that he can produce a balanced autumn statement to the satisfaction of himself and other Ministers, our decline in manufacturing industry, skills and infrastructure is continuing. The Government are economically rudderless. I trust that Conservative Members will recognise that and will vote against the Government, if not tonight, at least later.

Mr. Robert Harvey: The debate has reflected the fact that one of the main concerns of Conservative Members is not so much the general economic strategy enshrined in the autumn statement as the reluctance of the Government to accept and to give priority to what must be the most pressing issue in this Parliament.
The continued rise of unemployment after more than two years of recovery is alarming and it is no consolation that European countries suffer from the same ill. Of course the Government should continue to make balanced, stable economic growth their main goal and we should be proud of the reduction of inflation from 18 per cent. to less than 5 per cent. That is one of the greatest economic achievements of the past 20 years.
However, it would be an astonishing order of priorities if we made the reduction of inflation from 4·5 per cent. to zero our main priority for the next three years at a time when there are 3·25 million out of work and when more than 1 million people have been out of work for over a year.
Let us remember what government is for. Like all my hon. Friends, I believe that the less government, the better. Private enterprise should be left in peace to help to create wealth, but if greater wealth is created and a major group of people are being left without any share in that wealth, social tension will inevitably be generated as the lives of those people become pointless. It is the Government's duty to come up with an answer.
The Chancellor of the Exchequer has given two reasons why unemployment has failed to fall. First, there are large numbers of working women joining the labour force. One can accept that. Secondly, the unions continue to price their members out of work. One can also accept that, although those of us who have long believed in pay restraint in the public sector, and have seen the Government come round to that principle, could have seen that problem coming.
However, both those factors are merely symptoms of the larger industrial revolution in working patterns which is staring us all in the face, but with which no political party has yet come to terms.
Is it not possible that the reason why unemployment keeps going up during a period of sustained economic recovery is that fewer jobs are required to create more wealth, as a result of the introduction of new technology?
Is it not possible that the reason so many more women and part-time workers are coming onto the labour market is because that is the kind of non-union labour that the new industries prefer to employ? Is it not possible that the reason earnings are up for those in work is that, because of the productivity improvements made possible by the new technology, employers can afford to pay more while employing fewer people?
In 1970 there were 6,000 general purpose computers in operation. By 1980 there were 175,000. By 1983 there were 750,000. The revolution in working patterns brought about by technological change is already upon us.

Ms. Clare Short: rose—

Mr. Harvey: I would prefer not to give way because I have limited time. I am sorry.
In one industry after another throughout Britain, employers are working with more computers and fewer people. A local electricity board that serves my constituency employs 3,000 fewer people.
The country is looking to us to get to grips with the problem, but not by imitating an American example that cannot be repeated here. Jobs are being created in the United States, first, because a massive amount of enterprise capital was available to start up service businesses, and, secondly, because the Administration was prepared to run up a huge budget deficit. My right hon. Friend the Chancellor was entirely right to argue that we cannot do that here because we are an open economy and budget deficits to stimulate demand merely lead to import binges.
But that is not an invitation to sit on our hands and do nothing. There is a need for a significant, responsible, job-creating, capital spending programme to improve our rundown services in the regions. We need hospitals, housing and schools which will provide employment for some of the unskilled and semi-skilled labour which otherwise faces a truly bleak future. That is not an import-intensive area and if the price is to push up inflation from 4 to 5 per cent., it is a price worth paying.
Secondly, because of the conservatism of institutional investors in Britain, the Government need to go further into the business of channelling risk capital to new and expanding enterprises. Thirdly, there is a need for large-scale, voluntary, early retirement schemes, conditional upon providing new jobs for those entering the labour market. There is also a need for the expansion of job-sharing, sabbaticals and shorter working hours for those who want them. The Government must give a lead.
The alternative is too terrible to contemplate. It is of a society where the employed, union-protected majority grow richer while life for the minority out of work remains idle and impoverished.
I was elected last year in a constituency where unemployment averages 18 per cent. and touches 40 per cent. in some pockets. A generation is facing the future, and what ought to be the bright adventure of their lives, without hope, without a choice in life and without the opportunity to better themselves, which is, after all, what the Conservative party is all about.
The great tradition of helping those who cannot help themselves, which underlines the British way of life, has averted social upheaval in the past. Let the new wealth that the new technology is bringing be of benefit to all the British people.

Mr. Michael Hancock: Since coming to the House in June, I have hoped to see some spark from the Government that would lead me to believe that they had learned some of the lessons of the by-election in Portsmouth, South. I looked to the Queen's Speech in the hope that the programme that the Government were laying before the House would offer some semblance of hope to the British people. I am sure that I am not alone in saying that I was bitterly disappointed at what that speech contained.
I then looked to the next major platform — the Chancellor's autumn statement. Once again, sadly, having read it and witnessed two occasions on which the Chancellor has tried to justify it, I am amazed at the complacent and cynical way in which the Government


completely ignore the problems facing the British people. That is not a unique experience for me, because in the past 15 years I have sat on two Tory-controlled local authorities. Each year, at about this time, we have the preliminaries to the budget meeting in March. Each year, the Tory-controlled councils in Hampshire and Portsmouth would wheel out their political policy and budget, which would always have some element of doom in it and which would always be grasped by the majority of Back-Bench Tory members of those councils, and certainly the media.
Over the years I have begun to realise why that was done. I have begun to realise the purpose of a smokescreen—to divert attention from the issues facing those local authorities and people in the community. It was for no other reason than to hide the complete inadequacies of the main plank of what those councils were proposing to do. Now it is the Government's turn.
What we have witnessed in the Chancellor's autumn statement is surely not what was intended in 1982, when it was supposedly intended to bring before the House a full-scale green Budget as a preliminary to allowing the House to discuss the Government's programme for the next year. This is paying but lip service to that idea of 1982.
This year we have had a charade from the Chancellor. I can only suspect that there was some sort of conspiracy in the Cabinet, when Ministers discussed what they could slip in to cause such upheaval in Back-Bench ranks that it would create a smokescreen that would cover up the programme's inadequacies. They must have decided that the most acceptable face in the Cabinet to bear the brunt of a Back-Bench rebellion was the Secretary of State for Education and Science and the subject that would gain most support on the Back Benches in an attempt to divert media attention was student grants. What a neat ploy it was. Today is rather like after the Lord Mayor's show. After yesterday's back-tracking is the pay-off — the smokescreen being so effectively deployed.
But the real crux of what this Parliament should be about and what we should be saying today is contained on page 20 of the autumn statement. Listed there is point after point, which Labour and Conservative Members have tried to expose. They have tried to say that what the Chancellor is doing is not enough and, where he is making an attempt to offer some semblance of hope, he is doing so in the wrong place.
I come from a city with an appalling housing problem. The housing waiting list increases daily. At the same time the local authorities' housing programme and ability to do anything about it recedes. That is because the Government have reduced the authority's ability to spend and to deal with the real social problems of housing. The urban programme, once grasped by local authorities to offer some added incentive to their community, is, again, being reduced. Once again opportunities are being lost. Opportunities that were readily available only two or three years ago are now being reduced until they are virtually non-existent.
The real irony of what has happened over the past couple of days on education grants must be spelled out. The changes announced yesterday do nothing to counter the impression that the Government's education policy has no direction and no strategy other than to be penny-pinching. There is not the slightest spark of inspiration or imagination. One can offer some sympathy to those Ministers in the spending Departments who have

somebody breathing down their necks daily to remind them that the Chancellor is watching every move they make and reporting them back.
Despite the changes conceded by the Secretary of State yesterday, real hardship persists. Fifty thousand families must still find an extra £260 a year. The same number of students will be totally dependent on their parents. There will still be increases in the parental contribution, causing the burden of supporting the student to be shifted to the parent and away from the state. It seems that we expect those in higher education to be independent enough to vote and to fight for their country but not independent enough to make choices in education without their parents' consent, or to seek further education at all unless their parents are prepared to finance them.
The Conservative Back Benchers have been bought off at a high price. The budget for adult education, training and research has been cut, although those are the types of expenditure that we need to increase if we are to do anything about our economic decline.
Public expenditure plans allow for no priority to be given to training and retraining, yet all the evidence is that that is crucial to the nation. We should spend more on it. The engineering training board published a report last month which stated that there are many signs that skill shortages are becoming a serious impediment to national output. The report "Competence and Competition" reinforces that view.
The engineering training board showed that the demand for technicians in the engineering industry will be under-met by one third over the next few years, yet the spending plans take no account of the problems facing that industry—and that industry is not unique in today's economic climate. The money to buy off the Back Benchers was taken from the very areas on which we should be spending money. I have been a Member of this House only since last June, but I would have expected Conservative Members to see the folly of pursuing such a policy year in and year out.
Hon. Members have talked about tax cuts as a solution to unemployment. That suggestion has been made for three or four years, but the unemployment figures have continued to rise. Yet we are still persistently told by Conservative Members that tax cuts will rescue us from our unemployment mess. How long must we wait? How long must the list of the unemployed grow before we see some semblance of a return of those promises?

Mr. Anthony Nelson: It is disappointing to follow the hon. Member for Portsmouth, South (Mr. Hancock) who seems to be so disillusioned so early in his parliamentary career. It was even more disappointing to realise, as his speech progressed, that he seemed to have nothing to offer except a return to the old ways of spending, and borrowing and taxing, more. If he is searching for imaginative alternatives, it is not sufficient to criticise the autumn statement without explaining—as the SDP so often fails to do—what he himself would do instead.
I should like to refer to the international scene, which was touched upon by my right hon. Friend the Chancellor and also by my right hon. Friend the Member for Worthing (Mr. Higgins) who did the House a singular service by preparing the Select Committee report.
It is important for us to be aware that the Government's best hopes, in terms of budgetary expectations or fiscal plans, will inevitably depend on the world in which we live and with which we are increasingly interdependent. Having read some of the expectations set out in the autumn statement, I take the view that the waters will be rough in the world over the next year and that it is right to pursue a prudent course — such a course as is, broadly speaking, epitomised in the autumn statement.
Some of the world trends with which we shall have to cope give cause for concern. The United Kingdom's output has risen only half as much as that of other industrialised countries, while inflation is above average. In the United States, output is significantly above that of the average industrial country, while trends in capital investment, inflation and re-employment exceed those in this country.
At the same time, the most dramatic feature of the international economic scene is the record surplus that the Japanese economy is earning on its foreign balance of payments — £35 billion in the past year alone — compared with the record deficit by the United States of some $100 billion over the past year. Those massive movements of funds, and the trade that they imply, are to some extent areas of opportunity on which we are missing out. They reflect the still relatively poor level of productivity and competitiveness of British industry, on which my hon. Friend the Member for Carshalton and Wallington (Mr. Forman) commented so ably.
It is also a matter of great concern that the United States, which in terms of interest and currency dominates so much of the international trading scene, continues to maintain a federal deficit this year of around $167 billion. That, together with tight monetary control, means that the rest of the world is essentially financing the resurgence of the American economy. America is recovering at our expense and—as my hon. Friends are aware—at the expense of the developing countries which face problems with their foreign currency deficits because of the strength of the dollar, sluggish commodity prices and the burden of high interest rates. However, it is the continuing rapid development of the Pacific basin, with low actual and unit wage costs, lower real interest rates, and a surge in output, trade and investment, which provides the greatest challenge—and, I hope, opportunity—as we enter the new year.
It is important to bear those international factors in mind as we try to make value judgments about how we should spend our limited public resources on industry or on social requirements.
We must recognise the importance of keeping the new United States Administration to their undertakings on achieving lower deficits. We must also move, wherever possible, to strengthen the European Community as a trading and manufacturing bloc, by means of stability in exchange rates and industrial investment, and procurement strategies which direct fewer of our capital resources to the United States and the far east. We should remove internal Community barriers to capital investment and services. We must continue to uphold policies of free capital movements internationally. The substantial increase in the United Kingdom's net assets internationally, which has resulted from the release of exchange control some years ago has been vindicated by the enormous income that we

now receive—some £2 billion a year—in the form of dividends and interest from those investments. It has more than offset the enormous and tragic decline in the invisible income generated by our merchant shipping fleet, a decline of £1 billion on the level of three years ago.
The autumn statement is well set out, and a considerable improvement on the statements of previous years. I broadly support the overall level of spending for the next financial year and the intention to maintain that real level for the following two years. I am, however, concerned about the volume and nature of certain changes in spending plans since the White Paper. In particular, over £2·2 billion has been switched from some programmes to others, and much of that switch is from capital to current expenditure. For example, is it coincidence that cuts in spending on housing and roads amount to £680 billion whereas extra spending on the Department of Health and Social Security also amounts to £680 billion? One is a cut in capital expenditure, and the other an increase in current expenditure. That is difficult to justify. In my view, it is also difficult to justify spending on nationalised industries that amounts to over £1·3 billion in the next financial year when some £11 million—a relatively small sum—is being cut from the research budget of the universities. It is difficult to defend an increase of 21 per cent. in current expenditure by rate-capped local authorities when other local authorities will suffer significant cuts in support for essential and employment-promoting activities such as housebuilding and improvement and the maintenance of educational standards.
My greatest worry concerns the seeming inability to stem the ever-rising DHSS bill which now amounts to £56 billion or 42 per cent. of public expenditure. Why has it proved necessary to increase the provision of social security by £470 million when the Chancellor anticipates that the number of unemployed will remain roughly the same next year and when the rate of inflation, and therefore assumptions about the cost of increasing benefits, were no different when the last White Paper was written?
What has happened with the major review, which we discussed last year, on the future provision of social security? Can we sustain a social security bill of this size and satisfy ever-increasing expectations from benefits when we are cutting capital investment, spending oil revenue and selling off nationalised industries not to reinvest but to pay dole, supplementary benefits, pensioners and the rest?
The charges that we should be making are not those which are determined by immediate demands for larger handouts in Britain, but those determined by what is happening elsewhere in the world. We should be aware of and responding to the industrial challenge coming from the Pacific basin.
We should be rising to the competitive challenges coming from the United States and Europe in services and in manufacturing industry. We should be insuring against the day when the oil runs out. What will we say to pensioners and the unemployed then—that the money has run out because we have spent the seed corn? I believe that the Government are aware of these changes and of the course needed to avert them. This is the time to rise to those challenges. I hope that we shall have the conviction to do so.

Ms. Clare Short: The complacency of the Chancellor's speech was quite shocking. It means either that he does not live in the real world or that we have two nations in Britain. Birmingham, which is the second city of Great Britain and the heartland of its manufacturing, has 30 per cent. registered unemployment in its inner core, as was made clear by my hon. Friend the Member for Walsall, North (Mr. Winnick). When the Government came to power in 1979, unemployment was between 5 per cent. and 6 per cent. All that deterioration and all the misery, suffering and poverty in Birmingham has come about since the Government came to power and is the result of their policies.
The hon. Member for Clywd, South-West (Mr. Harvey) suggested that our problem is new technology and that we are producing less because robots are taking over the jobs of people. That is not the problem. If we discount oil-related growth from our total economic growth, we find that we are producing less than in 1979. It is not true that we have applied new technology and are therefore producing more. We have thrown people out of work and closed down factories and are now undermining our economic base. When the oil runs out, we shall be in enormous trouble.
The suffering of the people of Birmingham is disastrous. We have the highest level of long-term unemployment in Britain. The only higher level is to be found in Northern Ireland. Until recently, our region was as prosperous as the south-east. We have the greatest concentration of poverty in the United Kingdom measured in terms of the poorest census enumeration districts. The people of Birmingham experience that suffering and worry about the economy because anyone who drives out of the city on major roads will see factory after factory, which used to employ people, closed and decimated.
We are told that Birmingham has benefited from the recent announcement on regional aid because we have been included in a second-tier authority for the first time. Birmingham is highly dissatisfied because the new travel-to-work area, which the Government are using as a building block of their regional policy, is so massive that it includes areas such as Stratford-on-Avon, which is highly prosperous, thus reducing the average level of unemployment in the region, which means that we are in the second rather than the first tier. There is also a grave danger that when new investment comes to the area as a result of the aid, it will go to areas such as Stratford-on-Avon and possibly make central Birmingham even more poverty-stricken.
Another feature of the Chancellor's speech which I found highly objectionable was the re-writing of the history of unemployment in Britain which he has pursued for some time. Every time he makes a speech on this subject he suggests that unemployment in post-war Britain has risen relentlessly under successive Governments and that therefore some radical measures must be taken to deal with it. The truth is very different. Until 1970, unemployment in Britain was either just below or just above 500,000. We then had the Tory Government of 1970 with the philosophy of Selsdon man—one might say, the first time round for monetarism—under which unemployment shot off to 1 million. We then had the famous U-turn because, in those days, 1 million was considered unacceptable. Unemployment came down

again to 500,000. We then had the Labour Government of 1974 and the first oil crisis. Unemployment rose to 1·7 million and then came down again, before Labour left office, to 1·3 million. That was the figure on the posters designed by Saatchi and Saatchi—

Mr. John Maples: Will the hon. Lady give way?

Ms. Short: No, I have only 10 minutes—saying, "Labour isn't working." The Conservative Government formed in 1979 inherited an unemployment level of 1·3 million and they have taken us from there to 4 million. That is not a long-term trend: the graph shoots up in 1979. It is false of the Chancellor to suggest that it is a long-term problem and that unemployent has risen steadily. The massive unemployment that we have experienced since 1979 is a straightforward product of Government policy. It is wrong that the Government should try to re-write history, appropriately enough in 1984.
Another feature of the Chancellor's speech which was highly misleading, is the claim that Britain is doing better than most other countries. To make that case, he uses figures selectively to compare the performance of the British economy with that of other European economies. Some of the most reliable figures by which we compare unemployment rates in different countries are assembled by the United States Bureau of Labour—hardly a Left-wing organisation. It is necessary to do major adjustments to compare unemployment rates in different countries because the figures are collected in different ways—sometimes by census and sometimes by registration. Those figures show that our unemployment is significantly higher than that of all of our competitor countries, and we started in 1979 from a lower base. We are doing worse than other countries. Our unemployment is worse as a direct result of Government policy.
Another feature of every statement that the Chancellor makes about unemployment, which is immediately echoed by his Back Benchers, is his argument that only a cut in wage levels will produce a drop in unemployment. We know a lot about that in the west midlands. In 1979, we were one of the highest-paid regions in the country. As a result of the collapse of manufacturing since 1979, we are now among the lowest paid, yet there is no sign of that massive cut in wage levels leading to any regeneration. Indeed, a recent survey of major economic investors made by West Midlands county council showed that they regarded the west midlands as a disastrous area for new investment because of the low level of economic activity in the region.
How low must wages fall to make Britain competitive? Should we go to the levels of Bangladesh or Korea? We already have lower wage levels than other major developed countries. Is there no minimum? Is there no decent standard minimum below which people should not be expected to work? It seems not. That is the only argument advanced by the Chancellor, but we know that, if all of us agreed tomorrow to take a wage cut, demand would be cut and there would be more unemployment. He may have other objectives, but it is not true that a cut in wages, which will not happen anyway, will produce the great solution to the problem of unemployment.
The Government are engaged in a mad economic experiment. As Galbraith said, Britain is doing its duty to the rest of the world by proving that monetarism does not


work. However, the price is unbearable for the people in the west midlands, who are suffering, and unbearably worrying when we think about the future of our country and our economy. The manufacturing capacity of Great Britain is being damaged and diminished, and nothing is being put in its place. New technology is not going in, and when the oil runs out, our economy will be damaged for ever more.

Mr. Michael Fallon: At the heart of the debate and of the economic statement itself are the issues of public expenditure, privatisation and unemployment. Public expenditure is the Sisyphean rock of any Government, and the severity of the task facing this Government is shown by the linguistic osmosis that appears to have coloured the verbs with which Ministers describe their task. First, we heard that Ministers were in the business of reducing public expenditure, then it was controlling, restraining or holding it, and now we are told that it is being contained.
Not enough tribute has been paid to this Government for their achievement. I do not share the scepticism and criticism shown by some of my right hon. and hon. Friends earlier today. To keep so close to targets set some time ago is a considerable achievement. To keep the public sector borrowing requirement in the same order of magnitude as pertained many years ago is in itself a considerable achievement. It is a remarkable achievement to have substantially lowered from over 9 per cent. to 3 per cent. the proportion of gross domestic product that is consumed by public borrowing.
It is inevitable that while the Government tackle the problem of public spending there has to be some of the trimming and shaving that has upset many of the interest groups over the past few years. Inevitably, as a result of that, there are adjustments, simply because of the nature of public spending, during the fiscal year, which again upset many of the interests groups particularly affected by such a change.
Ministers might assist themselves if they not only provided more information on the wider issues, of which Command 9189 is an excellent example, but if they publicised more of the existing anomalies, distortions and subsidies within the public expenditure programme. For example, it might have been useful to know before last week to what extent lower income groups subsidise university education for the middle income groups. It might have been helpful for the country as a whole to know the extent to which the north and the midlands, for example, subsidise commuting in the home counties. It has always amazed me that my constituents in Darlington have to subsidise, to the tune of £250 million a year, commuting in places such as Carshalton and Guildford, to name but two.
It would be helpful to know the extent of the subsidies within the tax system—for example, the extent to which companies that are exempt from paying VAT, such as publishing companies, are being subsidised by those companies that do pay VAT. Again, I am puzzled as to why an engineering company in Darlington has for so long been subsidising a publishing company in Bedford square, London. Ministers would help themselves and the wider

debate if they would make available even more information about some of the background to public expenditure.
As to privatisation and the sale of assets, as my right hon. Friend the Member for Hertsmere (Mr. Parkinson) has said, privatisation is important, not just in revenue and balance sheet terms—the technical matter referred to in the Select Committee report—but because it has much wider implications. The sale of BT shows the enormous opportunities that lie ahead, not simply for the privatisation of industry but for the privatisation of utilities, which would release customers who at the moment are subject to monopoly charging and to supply-fixed industries that could be profitable and attract funds on the capital markets. We could release them and for the first time give consumers some control in return for the standing charges that they have to pay and the amount of the services of the utility that they consume.
There are many such profitable public utilities—for example, Thames water authority. Individual gas boards or regional electricity boards may be more profitable than others. I see no reason why a nationwide programme has to be initiated. Where there are reasonably profitable regional utilities that could attract funds and finance their own borrowing and expenditure measures, my right hon. and hon. Friends must give them a chance to do so.
Unemployment has been discussed very much from the point of view of the employed. We have heard continually from Labour Members about wage cuts not being part of the solution. However, a Government who have done so much to free the economy, and the south and the midlands, must do much more to free the unemployed, and allow them to price themselves back into work. I should like to see my right hon. and hon. Friends increasingly co-ordinating a right-to-work campaign that will break monopoly power and end the wages enforced either by statute or by union diktat, and will dismantle the restrictive practices, the demarcation disputes, the excessive overtime — all the practices that maintain high unemployment and prevent those who are out of work from having the chance to put themselves into work.
In the north-east, far too many people are trapped on council estates in unemployment. They cannot take part-time work without losing benefit; they cannot leave their council houses, and they have no chance in the heavily unionised industries of putting themselves back to work. It is no accident that the north-east is the region with the highest unemployment, and is the region that is the most heavily unionised. Despite that, in 1984, as in 1974, as the new earnings survey has just revealed, it still has, outside London and the south-east, the highest average male weekly earnings of any region. As the manager of my unemployment office put it the other day, there is plenty of work about but very few jobs. That is a paradox for the House to understand and for Ministers to resolve urgently.

Mr. Ray Powell: It is all very well for the hon. Member for Darlington (Mr. Fallon) to talk about there being plenty of work but no jobs, when he has never been to Wales. I am the only Welsh speaker to have participated in the debate so far. We have a saying in Wales "Cymru-am-byth" which means "Wales for ever". In this Chamber, it means "Wales for ever last." In the autumn statement, references to Wales are for ever last.
I have listened to a number of speeches about the autumn statement since the debate started. I have listened to a number of my hon. Friends talk about unemployment and its problems. Unfortunately, nobody is talking about the real world in the area where I live. No one is talking about unemployment, at a level in Maesteg of 25 per cent. No one is talking about the miners' strike, which is far more important than some of the issues that I have heard raised today.
The autumn statement refers to an estimated contingency fund of £3 billion. If the miners' strike continues, that £3 billion will soon be wiped out. It is estimated that the strike has cost the nation between £8 billion and £10 billion in nine months. What action, if any, have the Government taken to try to get the two sides together and resolve it?
Earlier, I listened to one of the most atrocious speeches that I have heard in my five and a half years here. I refer to the disgraceful speech of the hon. Member for Bridlington (Mr. Townend), who is part of the black economy with his company directorships, his wine shops and his employment in the House. Is it any wonder that there is unemployment outside the House?
The Chancellor of the Exchequer asked my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) to spell out the policies of the next Labour Government. In a remarkable speech my right hon. Friend outlined the policies that a Labour Government will pursue when we get elected—and we shall be elected.

Mr. Nicholas Winterton: On a point of order, Mr. Deputy Speaker. I have no wish to interrupt the debate, but there is a courtesy in the House that if an hon. Member mentions another hon. Member, especially discourteously, it is customary to give that hon. Member notice of his intention. Did the hon. Member for Ogmore (Mr. Powell) notify my hon. Friend the Member for Bridlington (Mr. Townend) that he intended to refer to him?

Mr. Powell: Mr. Deputy Speaker, we are within nine minutes of the Front Bench speeches which will conclude the debate. The hon. Member for Bridlington left his seat almost immediately after concluding his speech, and we have not seen him since.

Mr. Winterton: The hon. Member for Ogmore has not spoken before.

Mr. Powell: No, I have been waiting to be called, and I am the last hon. Member to speak from the Back Benches.
I refer to another Government supporter who is not here now. If he is not here, it is not up to me to tell him of my intention to refer to him. He has participated in the debate. I have been sitting here since 2.35 pm. I came into the Chamber immediately after prayers.
The right hon. Member for Hertsmere (Mr. Parkinson) referred to the speech of my right hon. Friend the Member for Sparkbrook and his analysis of tax concessions at the expense of higher unemployment. However, the right hon. Member for Hertsmere overlooked my right hon. Friend's comment that the Labour party would not promise massive tax reliefs to get elected and would never implement such policies once it was elected to government. That is what my right hon. Friend said, and it is quite significant, because I believe sincerely that a Tory Government would not have been elected in 1979 if they had promised what

they intended to carry out. They promised massive tax concessions and we are still waiting for them five and a half years later.
I ask the House to consider the opportunities that could be afforded, especially in Wales, for building. In Wales we have some 40,000 unemployed construction workers. We are crying out for homes, hospitals, schools, sheltered accommodation, new roads, sewers, and more transport development. Instead, under the present Administration, we are getting further cuts, further unemployment and a display of indifference from them.
On page 20 of the autumn statement, against "Trade and Industry", we read:
Additional provision is made for launch aid and for shipbuilding.
Recently I heard a speech by my hon. Friend the Member for Jarrow (Mr. Dixon), winding up a debate on shipbuilding. That debate spelt out what the shipbuilding industry wanted.
On page 21 of the statement, under "Nationalised Industries", we read:
This reflects a number of changes including the re-classification of London Regional Transport as a nationalised industry; decreased requirements for Electricity (England and Wales), British Shipbuilders,
and so on.
Can the Chief Secretary explain the differences between pages 20 and 21? What does he promise for the shipbuilding industry?
Under the heading "Capital Expenditure" we see one of the rare occasions when Wales is mentioned in the autumn statement. It says that there will be a large overspend on cash limits in England and Wales, and local authorities will be asked for further restraint. How many more jobs does that mean that we shall lose in Wales?
I am concentrating my remarks on Wales because the unemployment level in some areas has escalated to as much as 30 and 35 per cent. My hon. Friend the Member for Cynon Valley (Mrs. Clwyd) nods her approval, because her area is suffering mass unemployment as a result of the suggested closure of a number of collieries. The same applies in Maesteg. I have in mind, for example, St. John's colliery. At present we have 24 per cent. unemployment. If that colliery closes and its 834 miners are thrown out of work, it means that male unemployment will escalate to between 40 per cent. and 45 per cent.
That is what the miners' strike is about. It is not about money. It is not about increases. It is not about percentage increases. It is about jobs. The miners know, as do their wives and children, that if they do not fight now to retain their collieries and jobs it is not only the present employees who will be out of work. It means that their sons and grandsons will be without work. But not only does it mean the loss of jobs. It means the loss of communities. I was born and bred in the Rhondda, the son of a miner. I shall be proud of being the son of a miner until my dying day.
Miners are a special breed to themselves and to their communities. Conservative Members, especially the hon. Member for Bridlington, should talk to them and discuss their difficulties and problems. The people in my community have a fight. They will fight to the end because they want to retain jobs. They want to do so for their communities, their sons and their grandsons. I have great pleasure in returning to my people on a Friday and leaving the motley crowd on the Conservative Benches so that I can mix with people of real standing and stature.

Mr. Terry Davis: Like my right hon. Friend the Member for Birmingham, Sparbrook (Mr. Hattersley), I begin by referring to the report of the Select Committee on the Treasury and Civil Service and the speech of the right hon. Member for Worthing (Mr. Higgins). It was unfortunate that the report was available to hon. Members only at 11 o'clock this morning. Therefore, it was not available for us to read, digest and consider it before the debate. I realise that the contents of the report must have been made available at an earlier stage to the Chancellor of the Exchequer, because he dealt in some detail with his views on the report's recommendations, especially the most important ones. The lack of availability to the Opposition has made it more difficult for us to comment on it.

Mr. Higgins: The Committee was working under the most tremendous pressure of time. There was a small interval between publication and the debate because of the pressure from the Opposition for the debate to take place as early as possible.

Mr. Davis: I hope that the right hon. Gentleman will not take my remarks amiss. He is always free with his suggestions to the Government as well as the Opposition. I suggest that the Committee could have produced its report slightly earlier for the benefit of both sides of the House, and the right hon. Gentleman should not be so sensitive about a suggestion that has been made in such a modest way. The Committee did not meet until 19 November and it met twice during the following week. I leave my suggestion for the right hon. Gentleman's consideration.
For my part, I shall consider the speech of my right hon. Friend the Member for Ashton-under-Lyme (Mr. Sheldon), who gave the House the benefit of his experience and reflections on the procedure that is needed to determine priorities for public expenditure. I shall study his speech and the report and perhaps we shall return during a future debate to its main recommendation, which is the need for a better mechanism for determining public expenditure priorities.
The right hon. Member for Worthing, who, like my right hon. Friend the Member for Ashton-under-Lyme, has experience as a Treasury Minister, told the House that the present mechanism is not working. He referred to overseas aid and to the recent furore about student grants in giving two specific examples. I felt that he was criticising the Government's political judgment and not the mechanism. I wondered whether he was indulging in what I believe Conservative Members call coded language and criticising the judgments of the Chancellor of the Exchequer and the rest of the Cabinet. He criticised what the Chancellor has described as the Government's policies, pledges and priorities. However, we are debating the autumn statement and not the Select Committee's report.
The Chancellor has claimed in the autumn statement and in his speech today that the economy is making progress. He claims that we have had steady growth over the past four years. That is true if we take the output measure of growth. We shall put on one side the fact that the Chancellor has chosen the last four years and has not taken the Government's full period of office. We shall also put on one side the fact that the rate of growth has still not reached that which marked the end of the previous Labour Government in 1979.
If we are seeing steady growth and improvement in the economy, we are bound to ask what is the purpose of the improvement. During the past year, there has been no reduction in the level of unemployment. Indeed, unemployment has risen by 139,000 real people. If the level is adjusted by statisticians, there has been a greater rise, but I prefer to think of real people. Nor has there been any improvement in the standard of living of the unemployed, the sick or the elderly. There has been no expansion of public welfare or public services, which benefit not only the elderly and the unemployed but also the employed and their families.
The only objective of the Government's economic policy is to increase the private consumption of those who are still lucky enough to have jobs, especially those who are lucky enough to have jobs in privately owned industry or services. The Government are not concerned to improve the standard of living of those who work in the public service such as civil servants and National Health Service employees. It is revealed in the autumn statement that during the coming year the Government propose to squeeze the pay of civil servants and that of NHS employees by offering them only 3 per cent. at a time when the Government forecast that inflation will be running at 4·5 per cent., and at a time they forecast that wage increases in the private sector will be higher still. As my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Fisher) said, that assumption is either unrealistic or unfair.
Unemployment has been at the heart of the debate, as it is at the heart of the autumn statement. Unemployment has been the theme of speeches by my right hon. and hon. Friends and Government Members such as the hon. Member for Carshalton and Wallington (Mr. Forman), the right hon. Member for Guildford (Mr. Howell) and the hon. Member for Clwyd, South-West (Mr. Harvey). Of course, most Conservative Members were careful to distance themselves from Labour party policies, but they all urged that something be done about unemployment. We disagree, not about the disease, but about the cure.
When the Chancellor of the Exchequer was talking to the National Economic Development Council yesterday, he said that he too was worried about unemployment, but that there was nothing that he could do about it. What he meant was that he cannot do anything about unemployment because he is trapped between three constraints—the constraint of his prejudice, the constraint of his obsession, and the constraint of his determination to cut income tax even though a cut in income tax does not reduce unemployment as much as an increase of the same amount in public expenditure.
The Chancellor lacks both the will and the imagination to do something about unemployment. He is not usually unimaginative. He has lots of imagination about new taxes. Earlier this year he introduced a new tax—a tax for the first time on the interest on savings. Next year I have no doubt that he will introduce another new tax—on early retirement. We shall also experience a massive increase in another of the Chancellor's new imaginative taxes — the negative external financing limits for nationalised industries.
The autumn statement shows that the external financing limits will be reduced in the coming year by £500 million. I am sorry to say that that is another example of what has


been described as the Chancellor's funny figures. The real reduction in the external financing limits for nationalised industries is not £500 million, but £1·2 billion.
One of the few tables in the autumn statement which does not compare next year with this year is that which shows the external financing limits for nationalised industries. The Opposition have learnt that, when the Chancellor does not produce the figures, he usually has something to hide. When we compare the small print in the autumn statement with that in last year's autumn statement, we discover why the Chancellor is so coy. He is not comparing like with like. The lists of nationalised industries are not the same.
Next year, for the first time, he will include London Regional Transport, because of the abolition of the GLC. He will also lose British Telecom and British Airways as a result of other Government policies.
The revenue to replace the lost revenue will come mainly from the energy industries—coal, gas and electricity—and the water supply industry. The Chancellor will take £1·2 billion from consumers. At least, we assume he will. We must assume that the Chancellor will not reduce investment programmes in the nationalised industries. We must assume that he intends to raise the money, as he has before, through unnecessarily higher prices. If investment is kept at the same level even more unnecessarily higher prices will be introduced.
The consumers of water, gas and electricity include every household in the country. They include the unemployed as well as those with jobs, the poor as well as the rich, the sick as well as the healthy, the old as well as the young, and disproportionately so. The unemployed, the poor, the sick and the elderly need more heat and use more electricity and gas than the rest of us.
Electricity and gas are consumed not only by every family but also by industry. The Chancellor's decision to take an extra £1·2 billion from those nationalised industries will mean higher prices which will be paid by industry and will be reflected in higher industrial costs. That will have an inevitable effect on employment.
It is no use the Chancellor blaming trade union negotiators for every increase in industrial costs, when he is putting up the costs of every industry using gas and electricity. He is doing all that so that millions of pounds can be transferred from the gas and electricity supply industries to the Treasury to finance cuts in income tax for those who have not yet lost their jobs.
During this debate, several Conservative Members defended the use of the £1·5 billion to cut income tax by referring to the tax paid by the low paid. The right hon. Member for Hertsmere (Mr. Parkinson) was especially critical of the speech by my right hon. Friend the Member for Sparkbrook, accusing my right hon. Friend of retreating from recent speeches and of not recognising that the unemployed would pay taxes if the tax threshold were not raised. He did not seem to understand that when my right hon. Friend talked about tax paid by the unemployment, he was referring to value added tax and other indirect taxes, which bear most heavily on the unemployed, the elderly and those who receive social security payments. It is too much for the right hon. Member for Hertsmere, even if he was a member of the Standing Committee on the Finance Bill, to accuse my right hon. Friend of not wanting to raise the tax threshold. The right hon. Member for Hertsmere should know

perfectly well that the tax threshold will be raised automatically as a result of what is known as the Rooker-Wise amendment.
The right hon. Member for Hertsmere, who I thought used to be an accountant, does not understand the autumn statement. Clearly, the right hon. Member for Hertsmere and the hon. Member for Colne Valley (Mr. Wainwright) have not read the autumn statement as carefully as they should have done. They thought that the £1·5 billion would be used to raise the tax threshold under the Rooker-Wise amendment. [Interruption.] That is what they thought. I refer the right hon. Member for Hertsmere to table 1.9 in the autumn statement. That table clearly shows that the implied fiscal adjustment—that is what the Chancellor calls it—is calculated at £1·5 billion, after allowing for general receipts of £148·5 million.
If the right hon. Gentleman looks at paragraph 1.59 on the previous page, he will note that, as always, the Chancellor has followed the usual practice. Receipts have been projected
on conventional assumptions of revalorisation of the main direct tax allowances and thresholds".
The Rooker-Wise amendment is safe without the £1·5 billion. The right hon. Member for Hertsmere will note that that statement is correct if he takes the trouble to read the autumn statement more carefully.

Mr. Wainwright: That is an important point. Is the hon. Gentleman saying that the Labour party will regard it as sufficient if the next Budget merely complies with the Rooker-Wise amendment? Would any further lifting next March of the threshold beyond the Rooker-Wise amendment be a lower priority?

Mr. Davis: I shall come to that point directly. The hon. Gentleman must not escape responsibility for his earlier remarks. He, too, accused my right hon. Friend the Member for Sparkbrook of not wanting to raise the tax threshold.
Other Conservative Members who, no doubt, react the autumn statement more carefully argued for the £1·5 billion to be used to cut the taxes of low-paid people. The hon. Member for Carshalton and Wallington (Mr. Forman) in a persuasive speech went so far as to argue for a reduction in the national insurance contributions of the low-paid. I have a great deal of sympathy with that argument. But neither the low-paid nor the Labour party—I do not speak for the Liberal party—will be taken in by that argument.
We have had five years of Conservative Government. When we consider how the Chancellor of the Exchequer will use £1·5 billion in his next Budget, we are perfectly entitled to look at what the Government have already done to income tax and national insurance contributions.

Mr. Forman: I would listen with more sympathy to the hon. Gentleman's argument if it were not for the fact that his party, when last in government, as he knows, had many opportunities to take significant action on national insurance and did not manage to abolish the national insurance surcharge.

Mr. Davis: The hon. Gentleman, who may have been in that Parliament, will also remember what happened then in regard to income tax and national insurance contributions. He argued this evening that we should treat them equally and treat national insurance the same—as taxes paid by low-paid people.
I remind the hon. Member for Carshalton and Wallington of the figures. In the last year of the Labour Government, a single person on two thirds of average earnings paid 27·7 per cent. of his or her income in income tax and national insurance contributions. After the last Budget of this Government, that person on two thirds of average earnings pays not 27·7 per cent. but 29·5 per cent. of income in income tax and national insurance contributions. For a married couple, the comparative figures would be 22·2 per cent. in the last year of the Labour Government and 24 per cent. now. If the married couple had two children, the figures would be 12 per cent. then as compared with 13 per cent. now.

Mr. Tim Yeo: The hon. Gentleman has totally failed to answer the point made by my hon. Friend the Member for Carshalton and Wallington (Mr. Forman), which was about national insurance surcharge —the jobs tax. The hon. Gentleman's Government were only too willing to increase it. Every time they had to run cap in hand to the International Monetary Fund for a bit more money, they increased the job tax, which this Government have abolished.

Mr. Davis: What the hon. Gentleman does not know—he was not in the Chamber at the time—is that his hon. Friend the Member for Carshalton and Wallington referred to national insurance contributions, and I am now replying to the debate. I should be grateful if the hon. Member for Suffolk, South (Mr. Yeo) would be so polite as to attend a debate if he wishes to intervene in the windup speeches. I shall not give way to anyone else who was not present during the debate.
The Labour party advocated the abolition of its national insurance surcharge. It is true that it was introduced by a Labour Government at a time of crisis. The Labour party gave a higher priority to its abolition than was given to it by the Conservative party. [Interruption.] I will not be pushed from the point. We advocated its abolition, and if we had done it, we would have made sure that local authorities had the benefit as well as privately owned industry, in order to avoid low-paid people paying higher rates. [Interruption.]
However, we must look not only at the taxes on the low-paid. To get the full flavour of the Chancellor of the Exchequer's tax policy, we must look at his policy for someone who has higher than two thirds average earnings. Let us consider the position of a single person with five times average earnings. In the last year of the Labour Government, that person would have paid 53 per cent. of his income in tax. He now pays 45 per cent.
The right hon. Member for Hertsmere also claimed that the problem with the British economy is not shortage of demand. He told us about his visit to a motor manufacturer in Japan. He said that it was clear from his experience that our problems were due not to lack of demand but to trade unions and the strikers in our companies.

Mr. Parkinson: rose—

Mr. Davis: I shall not give way again. That was what the right hon. Gentleman said, and he is out of date. Obviously, he does not know that when the Rover factory at Solihull closed, under this Government, British Leyland management itself—through Sir Michael Edwardes, no

less—said that it was not because of industrial relations but because of lack of demand. When men were laid off for the third time running at Metro-Cammell in Birmingham this year, it was not because of bad labour relations. There had never been a strike there. It was because of lack of demand, as a result of this Government's policies.

Mr. Parkinson: The hon. Gentleman has spent half his speech misquoting me. I do not complain about that, but perhaps he will now comment on what I actually said. I pointed out that retail demand alone had risen by nearly £6 billion. I drew attention to the huge growth in world trade and the possibilities for the sale of British goods. I also mentioned that the Japanese company that I visited, which had grown by nearly 25 per cent. during the recession, had not lost a day through strike action in 33 years, whereas every motor manufacturer in this country—and there is no shortage of demand in the motor vehicles sector of the economy—has had strike action in the past two months. That is the contrast that I emphasised and which the hon. Gentleman is trying to avoid.

Mr. Davis: We are not going to have a debate about the motor industry now, and I intend to claim injury time from the Chief Secretary's winding-up speech. One reason why there are strikes in motor car factories now is that all those factories which never had strikes have been closed under this Government. That is what they got for not being militant.
A Labour Government would increase demand by increasing public expenditure because we believe that that would increase the number of jobs, both directly by employing people in the public service—in the social services and in the Health Service, to cite just two examples—and indirectly by producing more employment in private industry by increasing demand in the economy generally.
The right hon. Member for Guildford (Mr. Howell) disagreed and drew attention to certain economic studies which I have not seen. He said that my right hon. Friend the Member for Sparkbrook did not represent the complete spread of economic thinking. That is not surprising, as there is as much disagreement among economists as there is between our parties. The answer to the right hon. Member for Guildford was given by my right hon. Friend the Member for Ashton-under-Lyne who pointed out that four years of policies of cutting income tax had not succeeded in reducing unemployment. In any case, the right hon. Member for Guildford spoiled his own case by arguing both for tax cuts and for an increase in capital expenditure, so at least we agree on something, as a Labour Government would indeed increase public expenditure.
In real terms, public expenditure this year will be less. The £132 billion is the same as this year's plan for £126·3 billion after adjusting for inflation, but the Government will actually be spending £128 billion, so there will be a reduction next year. The same total is to be spent next year as was spent in 1983–84. For two years running there will have been no real increase. That is a source of satisfaction to the Chancellor, but to the Labour party it is a confession of failure.
We must examine not just the total but the pattern of public expenditure. Within the total, compared with this year and not with the previous plans for next year, in


percentage terms the budget for the EEC, albeit a small amount in absolute terms, has been doubled. The biggest increases are £2·8 billion on social security, £1 billion on the Health Service and £1 billion on defence.
The increase in social security expenditure is not due to any improvement in the standard of living for pensioners or people on social security benefits, who are protected only against inflation as determined in May. The 3 per cent. increase in real terms is due to the increased number of pensioners and, as the hon. Member for Chichester (Mr. Nelson) pointed out, the increased number of unemployed. That is the secret behind the autumn statement.
The £1 billion increase for the Health Service is a real increase of only 1 per cent. Anyone who has ever studied the Health Service knows that it needs more than that to stand still, given the effect of the increased number of pensioners and of technological improvements in medicine.
The £1 billion increase for defence, however, is a real increase of 3 per cent. For the Conservatives, defence is more important than the Health Service.
The Chancellor reminded us today that, if total public expenditure is kept constant, more money for one heading must mean less for another. The consequence of increased expenditure on social security due to increased unemployment, on the Health Service due to the increased number of pensioners and on defence due to Government policies and priorities must therefore mean that other services will suffer, and that is what will happen.
There is a reduction in real terms for education, for transport, for trade and industry and for employment. The biggest cut of all is in housing. There will be a cut of £200 million in cash when the allocation should have increased by £100 million merely to stay the same in real terms, as the Chancellor of the Exchequer originally planned. Therefore, the real reduction will be £200 million, which is a cut of 12 per cent. That cut is concentrated on capital expenditure where the real cut will be £400 million, and people in the building industry tell us that the reduction will be 25 per cent.
That is the cruellest cut of all. At present there is a terrible shortage of council houses in all our cities, and no doubt also in rural areas. In the areas where the shortage is worst, there is a major problem for owner-occupiers because houses are decaying around them. Yet the Government plan to spend not more, but less, on improvement grants. At the same time there is record unemployment in the building industry. That results from the Chancellor's insistence on an inflexible limit of £132 billion for public expenditure. It means that essential services such as housing, health, education and transport, will be cut to pay for the inevitable consequences of an aging population and rising unemployment.
The position is worse than that. We have not yet been given the detailed figures for each departmental budget. I presume that they will be published in February. Already we can see what is happening. There is a clear and deliberate Government policy, for which every Cabinet member must share responsibility, to transfer the cost of a service to the person who needs it.
It has been the Government's policy towards the Health Service ever since they were elected. That is why they have increased prescription charges from 20p to £1·60. They will increase prescription charges by a further 20p next year. At a time of 4·5 per cent. inflation, prescription

charges will increase by 12·5 per cent. The Government are transferring the cost of the Health Service from the healthy to the sick.
This summer the Secretary of State for Social Services took £1 a week from thousands of the poorest pensioners to pay for the increased cost of social security as a result of rising unemployment. Only a fortnight ago the Foreign Secretary robbed Peter to pay Paul. This week the Secretary of State for Education and Science tried to make students and their parents pay for scientific research. In exactly the same way, the Secretary of State for Employment plans to provide for a higher level of redundancy payments by closing 29 skillcentres. The Secretary of State for Transport is planning God knows what by taking away bus passes from pensioners.
That goes on in every department. Just as the Chancellor is not alone in his responsbility for public expenditure cuts, so he is not alone in his responsibility for unemployment. His right hon. and hon. Friends share the responsibility. This week they showed what they could do. They managed to make the Government Front Bench climb down over student grants. Conservative Members should help the Chancellor, just as they helped the Secretary of State for Education and Science.
As my right hon. Friend the Member for Sparkbrook and my hon. Friend the Member for Walsall, North (Mr. Winnick) pointed out, 3 million unemployed people and their families wait to see whether Tory Members care as much about the unemployed as they do about parents with above average incomes and children at university.
Public expenditure and the public sector borrowing requirement will be £1·5 billion extra this year because of the cost of the miners' strike, yet the Government refuse to spend £1·5 billion next year to create jobs. The Chancellor has the money, but he will use it to cut income tax. We know that he will not cut taxes, because he is considering the introduction of new taxes. He plans to extend VAT to tea, biscuits, books, newspapers and children's shoes, none of which has ever been taxed before. What will he do with the extra money? Will he use it to help the needy, house the homeless, treat the sick, educate our children, provide warmth for the elderly, train the unemployed or create jobs? No, this Tory Chancellor, this Tory Government and these Tory Members will use it in the only way they know how: to cut income tax for those who still have jobs and to cut it most for the people who have most.
The autumn statement shows that the Government prefer to cut taxes for people of above average earnings instead of reducing unemployment; and prefer to use the money to cut taxes rather than increase spending on essential public services. The autumn statement is a smokescreen for a deliberate and direct attack on the idea of the social compact that we all have with one another, an agreement that we will make effective provision for our common needs—education and old age—and for those human misfortunes of sickness and unemployment.
The autumn statement is a charter for selfishness. it is the financial equivalent of "stand on your own feet", and "on your bike". It shows that the Government have turned their backs on the belief that "no man is an island". It is a rejection of the idea of fraternity, and it should itself be rejected by the House tonight.

The Chief Secretary to the Treasury (Mr. Peter Rees): This has been an interesting and stimulating debate, and we have had a speech full of verve from the hon. Member for Birmingham, Hodge Hill (Mr. Davis), but that is not surprising as the questions at issue lie at the heart of this and, indeed, any Government's responsibilities.
If government is about choice, as Aneurin Bevan reminded us—essentially, public expenditure is about choice—the aggregate of public expenditure is the reconciliation of the myriad of choices, some great and some small; but the ultimate luxury of political debate is to detach one choice from all the others that must be made and assume that somehow that aggregate can remain unaffected.
It is against that background, and against the experience that I have gained—sometimes painfully, I admit, through two public expenditure rounds—that I come to the notable contributions to the debate.
I am sure that the House is indebted to the Select Committee on the Treasury and Civil Service for a thoughtful critique of the autumn statement, which has been reinforced by a powerful contribution from my right hon. Friend the Member for Worthing (Mr. Higgins). The House may not be surprised to hear that I do not accept its conclusions in their entirety, but I recognise that I am right to pay tribute to it as a valuable contribution to our debate. We have been fortunate in having contributions from two former Financial Secretaries—my right hon. Friend the Member for Worthing and the right hon. Member for Ashton-under-Lyne (Mr. Sheldon). I am sure that we were all grateful to the right hon. Member for Ashton-under-Lyne for his candid admission of what it was to be a Treasury Minister under a Labour Government.

Mr. Jeff Rooker: While the right hon. and learned Gentleman was advocating all the fiddles.

Mr. Rees: The hon. Gentleman can apply his forensic talents to the problems of housing. If he wishes to intervene in those debates, I am sure that he will listen with respect. He can carry his obsessions to other matters.
We were touched by the candid admission of the right hon. Member for Ashton-under-Lyne that the problem that he faced was that all the Labour Government's plans were predicated on the basis of a growth in resources which just did not occur. That is a trap which I am sure my right hon. Friend and the other members of the Treasury Front Bench do no wish to repeat in this Parliament.

Ms. Short: The right hon. and learned Gentleman is certainly ensuring that there is no growth.

Mr. Rees: The hon. Lady has made her contribution, and I hope that I may come to it in due course. She fails to observe that over the past four years the country has managed to increase its gross domestic product by 2·5 per cent. on average. I am aware that the hon. Lady and the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) find it hard to accept those facts, but I hope that we can at least debate those issues on some common ground. [Interruption.]
The Committee's report is perhaps more interesting than the contributions of the hon. Member for Blackburn (Mr. Straw), who did not take part in the debate. I do not

blame him for that because I know that he has other responsibilities. The Committee's report is critical of the mechanism by which decisions in the public expenditure round are taken and calls for a reversal of the methods by which public expenditure priorities are determined. It suggests that priorities are determined somewhat arbitrarily at bilateral meetings between the Chief Secretary and his spending colleagues. I suspect that it faced the Chief Secretary with a somewhat awesome role, to which this Chief Secretary certainly does not lay claim. The reality is somewhat different.
First, negotiation takes place against the background of manifesto commitments, of individual decisions over previous years, of known governmental priorities and of the Green Paper on long-term public expenditure trends which we, the first Government to do so, published last year. Secondly, aggregate spending for next year is determined collectively by Cabinet in July. The final outcome is the subject of collective review by Cabinet. Thirdly, the process of determination is subject to inputs from many sources. The more sensitive the political issue the less likely it is that it will be determined, even in the first instance, by just two Ministers.
At the end of the day the conclusions of Government are submitted to the House of Commons whose decision must be paramount, as the Government are the first to recognise. It is tempting to suggest that the whole process should be put into commission. A moment's reflection, however, particularly by my right hon. Friend the Member for Worthing, with his experience of government, will show that this is hardly a practicable way of determining the hundreds of issues, many of great detail and complexity, which have to be determined in the course of a public expenditure round. I understand that the Japanese Cabinet goes into continuous session, which often lasts for two days, to determine these issues. Whether that suits the Japanese temperament and system is not for me to say. I am not certain whether the outcome, in British terms, would be more successful than that which we have achieved.
There were questions from the right hon. Member for Sparkbrook and others about what happened during the course of this public expenditure round. They must contain their curiosity until such memoirs as are going to be published are published. We have a wealth of knowledge and experience of what happened under previous Labour Administrations. I suspect that a little more discrimination will be shown by the members of the present Administration.

Mr. Wainwright: Since the right hon. and learned Gentleman is claiming so much for the present system of allocating public expenditure, we do not to have to wait for memoirs for him to tell us whether the original decision of the Secretary of State for Education and Science about student grants was specifically and explicitly endorsed by the Cabinet. Or did it never go to them?

Mr. Rees: The House will understand that I do not intend to gratify the curiosity of the hon. Gentleman on this point. I subscribe, as do all my colleagues, to the doctrine of collective responsibility.

Mr. Straw: Except to the lobby.

Mr. Rees: The hon. Member for Blackburn may leak all his innermost thoughts to the lobby, but his example is not followed by this Administration.
The next substantial criticism in the report is that the true underlying level of public expenditure is significantly understated. That point was made by my hon. Friend the Member for Bridlington (Mr. Townend) and also by the hon. Member for Stoke-on-Trent, Central (Mr. Fisher). It is a serious charge, with which I shall attempt to deal.
The report draws attention to the figures for increased asset sales, the treatment of the abolition of the national insurance surcharge, and the treatment of debt interest. This is a criticism of both form and substance. As regards form, so long as the accounting conventions are consistent—the accounting conventions which we follow are adopted internationally and were adopted by the previous Labour Administration—clearly understood and transparent, I see no harm in the treatment afforded to them in the autumn statement and in previous public expenditure White Papers.
As regards substance, there has been no shortfall in the previous years of this Administration in the figures for asset sales. The point has been made in this debate, as it has been made in previous debates, that asset sales should be treated in a different way. It has been said that they should be treated as a means of financing public expenditure. I throw back this question. I am bound to say that I did not receive a satisfactory answer in last year's debates and I do not anticipate that I shall receive a satisfactory answer in this debate. If that is so, it follows that the acquisition of assets should be treated in a separate way.
After the success of the BT issue, I have modest optimism about future privatisation ventures. Therefore, the figures in the autumn statement are relatively modest; they show an increase of only £500 million on the figure in the public expenditure White Paper.

Mr. Fisher: How does the Chief Secretary explain the increase in asset sales of £500 million?

Mr. Rees: That would be a matter of commercial confidentiality. I would not declare to the House the exact figures that we hoped to achieve in any privatisation venture. The hon. Gentleman, with his deep understanding of these matters, will readily appreciate that such action by me could prejudice the market. I am sure that the Opposition would say that I was giving my friends outside the House the chance to make a big killing. Such charges come all too readily from Labour Members.
The right hon. Member for Sparkbrook suggested that the figures for council house sales were illusory, but the House will recall that interest rates have come down, there have been changes in house prices and the Housing and Building Control Act has put the opportunity of buying their own homes within the reach of many more of our fellow countrymen. The appetite of the British people to own their own homes, even when those homes were generated by the public sector, is still unsatisfied.

Mr. Fisher: Will the Chief Secretary give way?

Mr. Rees: No. I hope that I have dealt fairly with the points made by the hon. Gentleman and I have many more to answer.
It is true that there has been no adjustment to the totals, in spite of the abolition of the national insurance surcharge. However, it is the convention that, with cash planning, not every such change calls for an adjustment of

the planning totals. Otherwise, changes in, for example, corporation tax and VAT, which might work the other way, would have to be reflected in the totals.
Debt interest was the subject of another charge made by the Select Committee. Since 1979–80, debt interest has not formed part of the planning totals, because the amount of interest is too volatile for it sensibly to form part of a control total. However, it is, of course, taken into account in the overall strategy of the Government.
The third substantial criticism made by the Select Committee is that the Government are unlikely to keep their expenditure within the 1985–86 planning totals. I remind the House that this is the fourth year in which Government Departments have been planning in cash. In each year since March 1982, with the exception of the current year, the outturn has been within the White Paper totals. That is not a bad record. However, I candidly admit that the overshoot for the current year is likely to he about £1·5 billion.
Naturally, that is a matter of profound regret to me, but let me identify two of the main causes of the overshoot. The first is the miners' strike. I do not think that, on any fair view, that industrial encounter could or should have been foreseen when last year's autumn statement was prepared and debated. Nor do I believe that the miners' strike should be regarded as a precedent for future years. If Labour Members encourage their friends in the trade union movement to repeat that sort of encounter, the country will be able to judge their dedication to the welfare of their fellow countrymen.
The second item is the likely current overspend by local authorities, which could total as much as £1·2 billion this year. We have taken stern measures to ensure that such an overspend should not be repeated next year. First, an extra £900 million has been allocated for local authority current expenditure, a tougher holdback regime will be instituted and the 18 local authorities that, together, account for 80 per cent. of the overspend will be rate-capped. That demonstrates the purpose behind that measure.
Beyond that, we shall have a contingency reserve of £3 billion. Some have criticised us for reducing that sum from the £3·75 billion which appeared in the public expenditure White Paper. It is reasonable to have a larger reserve for later years—the greater the distance in time, the greater the uncertainties—but, beyond that, we have allocated an extra £2 billion to certain demand-led programmes—the intervention board's purchases, the Export Credits Guarantee Department and the social security programme.
I turn with less relish to the rather bombastic intervention of the right hon. Member for Sparkbrook As we know that he is a kindly person, we were sorry indeed that he should have traduced my right hon. Friend the Chancellor in the way that he did. I hope that we shall be able to maintain the courtesies of debate. I am sorry that such a genial figure as the right hon. Gentleman should try to project himself in a cold, cutting role.
The right hon. Gentleman identified unemployment as the crucial issue, but he posed a wholly bogus dilemma between cutting taxation and cutting unemployment. That is not a dilemma that I recognise. It is possible, and over the course of time the Government's policy will demonstrate, that both taxation and unemployment can be cut.

Mr. Hattersley: Ministers have been saying for five years that over the course of time their policies will cut unemployment. When will the promise be kept?

Mr. Rees: The right hon. Gentleman must contain himself with patience. Let me remind him—[Interruption.] Allow me to make the relevant point. The right hon. Gentleman was a member of several Administrations over about 20 years up to 1980 under which public expenditure, taxes and unemployment rose. Was he happy wih the record of the Administration of which he was a distinguished member? This Government states that there is not the facile correlation which he asserts between cutting taxes and cutting unemployment.
The implication in the right hon. Gentleman's proposition is that our tax cuts have been directed primarily to the better-off. Let us look at the facts. The threshold for a married man or a single man has more than doubled since 1979. Let the right hon. Gentleman ponder that simple proposition.
Let me remind the right hon. Gentleman and the House that, over and above the indexation of the thresholds, our policies have taken 850,000 of our fellow countrymen out of tax. That is a record of which we can be proud.

Mr. Straw: rose—

Mr. Rees: No, I shall not give way. The hon. Gentleman took no part in our debate. He will have other opportunities. I am not giving way to the hon. Gentleman.
The right hon. Member for Sparkbrook made a range of spurious points. He turned, predictably, to gas and electricity prices. He cannot have heard the evidence given recently to the Select Committee by Sir Denis Rooke and Mr. Philip Jones who both suggested that there would probably be no increase in real terms. Let me remind the right hon. Gentleman and the House that under the Administration of which he was a distinguished ornament—he can move uneasily on the Bench, because the facts should be known and repeated—electricity prices, for example, went up by 170 per cent.—2 per cent. for every five weeks of that Administration. Under this Government it has been 2 per cent. every two years. Did he regard that as taxation in those days?
We know, because we have all read the noble Lord Barnett's admirable work, that the right hon. Gentleman voted without conviction for those measures. The only conviction that the right hon. Gentleman shows is the conviction that he shows in these debates now. The role of the passionate compassionate defender of the less well-off members of our society befits him ill. The Franciscan habit does not sit easily on his shoulders.

Mr. Rooker: Hark who is talking.

Mr. Rees: I have never made the assertions that the right hon. Gentleman has. I know my limitations. [HON. MEMBERS: "Oh."]
However, there was one great omission from the speech of the right hon. Member for Sparkbrook. After every intervention, we were told that he would turn in due course to the policies that he would propose to the country if he were Chancellor of the Exchequer. It may be that I dozed off, but none of my hon. Friends can tell me what exactly those policies were. I will very readily give way to the right hon. Gentleman if he will tell me just one thing. By how much, if he were Chancellor, would he increase the planning total? [HON. MEMBERS: "Stand up."] If, as I

suppose, the implication is that they would be increased by a sizeable amount, what would be the consequences for interest rates, and how would he finance them? By borrowing, or by taxation?
I see that the hon. Member for Colne Valley (Mr. Wainwright), who spoke for the Liberals, has been joined by powerful reinforcements in the form of the right hon. Member for Glasgow, Hillhead (Mr. Jenkins). As I often do, I shall pay unsolicited tribute to the right hon. Gentleman, who was one of the few Chancellors who has ever managed to produce a balanced budget.
At least the spokesman for the Liberal party was candid and precise, and gave a figure. That figure does not bear close examination and I do not believe that it would make a substantial contribution towards solving the problem of unemployment, but at least the hon. Gentleman shared his thoughts with the House.

Mr. Rooker: When shall we see a balanced Tory Budget?

Mr. Rees: I have said that in due course we hope to move to zero inflation. [HON. MEMBERS: "Next year?"] No, not next year.
I turn to a point that has exercised the minds of various right hon. and hon. Members, including the right hon. Member for Sparkbrook, the hon. Member for Colne Valley and my hon. Friends the Member for Macclesfield (Mr. Winterton) and for Clwyd, South-West (Mr. Harvey). This is the question of the infrastructure and capital investment. The facts should be more generally known. Since 1979—net of sales, which is what often confuses the right hon. Gentleman—we have been spending £9 billion in cash every year. In other words, if one takes away the figure for sales against which that figure has been netted off, that means a gross figure of £22 billion per annum. That figure disregards the current spending. The hon. Member for Colne Valley is worried about the deterioration of the infrastructure, but the best estimate of the Department of the Environment alone—leaving aside nationalised industries, for instance—is that £5 billion is spent on repairs every year.
Beyond that, private investment has increased considerably. Taken together in 1984–85, private and public investment is likely to be of the order of £45·5 billion. It is true that one could have a sensible debate about whether the figure should be increased still further. I believe that the supposition that every form of infrastructure investment is necessarily for the good of the country and generates jobs is fallacious, but those who assume that nothing is being done are wildly wide of the mark. The emphasis is always on movement towards the private sector, because that is the philosophy that underlines the present Government's policies.

Mr. Fisher: Will the right hon. and learned Gentleman deal with oil revenues and the exchange rate?

Mr. Rees: Yes, those are matters of importance. The right hon. Member for Sparkbrook referred to statements attributed to the Minister without portfolio, Lord Young. Lord Young did not suggest that those aged 16 and 17 should be deprived of supplementary benefits. He said that it is much better to provide them with a job or with training. That must be a better way to start off than supplementary benefit. I am sure that the House


appreciates the fact that he was prepared to share his thoughts so openly. That is how we should debate these matters.
Perhaps I might now return to the main theme of the Government's overall public expenditure policy as reflected in the autumn statement. It is to hold public expenditure broadly stable in real terms. That is the basis for the figure of £132 billion in the autumn statement. It reflects the figure in the last public expenditure White Paper. It also reflects the figure in the public expenditure White Paper before that and it was the figure on which we fought the last general election—no secret manifesto there.
I do not think that I need emphasise to the House that this is not an easy objective. It was recognised by those who have had a taste of government and by my hon. Friend the Member for Darlington (Mr. Fallon). I have been and no doubt will continue to be assailed by some who say that the figure is too high and that our budgetary aims and methods are too lax and by others who say that it is too low, that the target is too stringent and too insensitive. I must say that I take some comfort from the balancing nature of these criticisms.
I take some comfort from those who argue for a higher total because, like the right hon. Member for Sparkbrook, they are usually evasive about what it should be, how it should be financed, the consequences for interest rates or inflation, and why the consequences of such a course should be different from those experienced by Administrations emancipated from Professor Hayek and the kitchen sink. There will always be siren voices that tell us that all our problems can be resolved by larger and larger infusions of public money.
To those who argue for a lower total, I listen with more respect, but I ask them to tell the House where and how they would look for the economies that would be needed, and how far they would be prepared to back such decisions when the going got rough. The course that we have adopted is in fact a tough one. That I will not deny. Contrary to popular mythology, it does not involve and has not involved a regime of savage cuts. For real cuts one has to look back to the last Labour Government who were lured by the IMF, to France and, it seems likely, to the United States, but our policies mean that the inevitable and necessary increases in various programmes should be offset by economies in others and that priorities should be reviewed from time to time.
However, if ours is a tough policy it offers three incomparable advantages. First, the advantage of stability. Those outside Government who have to chart their course with a wary eye on Government and have to decide whether to invest and whether to take on extra employees have the assurance of a stable framework within which to cast their plans. They have the assurance that there will not be 17 or 18 Budgets during the lifetime of this Parliament. The second advantage is that, as the economy grows—in spite of the gloomy fulminations of the right hon. Member for Sparkbrook, the economy has grown and is continuing to grow—the share of the country's resources taken by the state will go on falling from 43·5 per cent. in 1981–82 to 41 per cent. in 1985–86. The third advantage is that Government will have the scope to take rational decisions about the structure and rate of taxation. The figure of £1·5 billion quoted by my right hon. Friend the Chancellor for next year's fiscal adjustment may be

hedged around with many qualifications, but it suggests that there should be scope for further reductions in the burden of taxation.
This is a policy of which our fellow countrymen approve, because it will take more of them out of tax altogether. It is often overlooked that demand can be created through higher net incomes just as surely as by higher Government spending. Wage negotiators are not entirely unaware of the impact of direct taxation. It is therefore right to stress that jobs, too, can be created by tax cuts—indeed, some might say more effectively in the longer term than by increased Government expenditure. The decision that we take tonight is therefore about jobs. Irrespective of whether the fiscal adjustment is used in that way, it is important that a Government's capacity to take decisions should not be frittered away by the slow remorseless drift of public expenditure.
I commend this autumn statement to the House on the basis that it is the prospectus on which my right hon. and hon. Friends fought the last two elections. That is, the prospectus which was overwhelmingly endorsed by our fellow countrymen. That prospectus is as sound today as it was when it was devised. It is the prospectus that I invite my right hon. and hon. Friends to support in the Division Lobby tonight.

Question put, That the amendment be made:—

The House divided:Ayes 199, Noes 346.

Division No.38]
[10.00 pm


AYES


Abse, Leo
Cox, Thomas (Tooting)


Adams, Allen (Paisley N)
Craigen, J. M.


Anderson, Donald
Crowther, Stan


Archer, Rt Hon Peter
Cunningham, Dr John


Ashley, Rt Hon Jack
Davies, Rt Hon Denzil (L'lli)


Ashton, Joe
Davies, Ronald (Caerphilly)


Atkinson, N. (Tottenham)
Davis, Terry (B'ham, H'ge H'l)


Bagier, Gordon A. T.
Deakins, Eric


Banks, Tony (Newham NW)
Dixon, Donald


Barnett, Guy
Dormand, Jack


Barron, Kevin
Douglas, Dick


Beckett, Mrs Margaret
Dubs, Alfred


Bell, Stuart
Duffy, A. E. P.


Benn, Tony
Dunwoody, Hon Mrs G.


Bennett, A. (Dent'n &amp; Red'sh)
Eadie, Alex


Bermingham, Gerald
Eastham, Ken


Bidwell, Sydney
Evans, John (St. Helens N)


Blair, Anthony
Ewing, Harry


Boothroyd, Miss Betty
Fatchett, Derek


Boyes, Roland
Faulds, Andrew


Bray, Dr Jeremy
Field, Frank (Birkenhead)


Brown, Gordon (D'f'mline E)
Fields, T. (L'pool Broad Gn)


Brown, Hugh D. (Provan)
Fisher, Mark


Brown, N. (N'c'tle-u-Tyne E)
Flannery, Martin


Brown, R. (N'c'tle-u-Tyne N)
Foot, Rt Hon Michael


Brown, Ron (E'burgh, Leith)
Forrester, John


Caborn, Richard
Foster, Derek


Callaghan, Jim (Heyw'd &amp; M)
Foulkes, George


Campbell, Ian
Fraser, J. (Norwood)


Canavan, Dennis
Freeson, Rt Hon Reginald


Carter-Jones, Lewis
Garrett, W. E.


Cartwright, John
George, Bruce


Clark, Dr David (S Shields)
Gilbert, Rt Hon Dr John


Clarke, Thomas
Godman, Dr Norman


Clay, Robert
Gould, Bryan


Clwyd, Mrs Ann
Hamilton, W. W. (Central Fife)


Cocks, Rt Hon M. (Bristol S.)
Hancock, Mr. Michael


Cohen, Harry
Hardy, Peter


Coleman, Donald
Harrison, Rt Hon Walter


Concannon, Rt Hon J. D.
Hart, Rt Hon Dame Judith


Conlan, Bernard
Hattersley, Rt Hon Roy


Cook, Frank (Stockton North)
Healey, Rt Hon Denis


Corbett, Robin
Heffer, Eric S.


Corbyn, Jeremy
Hogg, N. (C'nauld &amp; Kilsyth)


Cowans, Harry
Holland, Stuart (Vauxhall)






Home Robertson, John
Powell, Raymond (Ogmore)


Howells, Geraint
Prescott, John


Hoyle, Douglas
Radice, Giles


Hughes, Dr. Mark (Durham)
Randall, Stuart


Hughes, Robert (Aberdeen N)
Redmond, M.


Hughes, Roy (Newport East)
Rees, Rt Hon M. (Leeds S)


Hughes, Simon (Southward)
Richardson, Ms Jo


Hume, John
Roberts, Ernest (Hackney N)


Janner, Hon Greville
Robertson, George


Jenkins, Rt Hon Roy (Hillh'd)
Robinson, G. (Coventry NW)


John, Brynmor
Robinson, P. (Belfast E)


Kennedy, Charles
Rogers, Allan


Kilfedder, James A.
Rooker, J. W.


Kilroy-Silk, Robert
Ross, Ernest (Dundee W)


Kinnock, Rt Hon Neil
Ross, Stephen (Isle of Wight)


Kirkwood, Archy
Rowlands, Ted


Lamond, James
Ryman, John


Leadbitter, Ted
Sedgemore, Brian


Leighton, Ronald
Sheldon, Rt Hon R.


Lewis, Ron (Carlisle)
Shore, Rt Hon Peter


Lewis, Terence (Worsley)
Short, Ms Clare (Ladywood)


Litherland, Robert
Short, Mrs H,(W'hampt'n NE)


Lloyd, Tony (Stretford)
Silkin, Rt Hon J.


Lofthouse, Geoffrey
Skinner, Dennis


Loyden, Edward
Smith, C.(Isl'ton S &amp; F'bury)


McCartney, Hugh
Smith, Rt Hon J. (M'kl'ds E)


McCrea, Rev William
Snape, Peter


McDonald, Dr Oonagh
Soley, Clive


McKay, Allen (Penistone)
Spearing, Nigel


McKelvey, William
Stewart, Rt Hon D. (W Isles)


Maclennan, Robert
Stott, Roger


McNamara, Kevin
Strang, Gavin


McTaggart, Robert
Straw, Jack


McWilliam, John
Thomas, Dafydd (Merioneth)


Madden, Max
Thompson, J. (Wansbeck)


Marek, Dr John
Thorne, Stan (Preston)


Marshall, David (Shettleston)
Tinn, James


Maxton, John
Torney, Tom


Maynard, Miss Joan
Wainwright, R.


Meacher, Michael
Wallace, James


Meadowcroft, Michael
Wardell, Gareth (Gower)


Michie, William
Wareing, Robert


Mikardo, Ian
Weetch, Ken


Millan, Rt Hon Bruce
Welsh, Michael


Miller, Dr M. S. (E Kilbride)
White, James


Morris, Rt Hon A. (W'shawe)
Wigley, Dafydd


Morris, Rt Hon J. (Aberavon)
Williams, Rt Hon A.


O'Brien, William
Wilson, Gordon


O'Neill, Martin
Winnick, David


Orme, Rt Hon Stanley
Woodall, Alec


Paisley, Rev Ian
Wrigglesworth, Ian


Park, George
Young, David (Bolton SE)


Parry, Robert



Patchett, Terry
Tellers for the Ayes:


Pavitt, Laurie
Mr. James Hamilton and


Pendry, Tom
Mr. Sean Hughes.


Pike, Peter





NOES


Adley, Robert
Biffen, Rt Hon John


Aitken, Jonathan
Biggs-Davison, Sir John


Alexander, Richard
Blackburn, John


Alison, Rt Hon Michael
Blaker, Rt Hon Sir Peter


Amery, Rt Hon Julian
Body, Richard


Amess, David
Bonsor, Sir Nicholas


Ancram, Michael
Bottomley, Peter


Arnold, Tom
Bottomley, Mrs Virginia


Ashby, David
Bowden, A. (Brighton K'to'n)


Aspinwall, Jack
Bowden, Gerald (Dulwich)


Atkins, Rt Hon Sir H.
Braine, Sir Bernard


Atkins, Robert (South Ribble)
Brandon-Bravo, Martin


Atkinson, David (B'm'th E)
Bright, Graham


Baker, Nicholas (N Dorset)
Brinton, Tim


Baldry, Tony
Brittan, Rt Hon Leon


Banks, Robert (Harrogate)
Brooke, Hon Peter


Bellingham, Henry
Brown, M. (Brigg &amp; Cl'thpes)


Bennett, Sir Frederic (T'bay)
Browne, John


Benyon, William
Bruinvels, Peter


Best, Keith
Bryan, Sir Paul


Bevan, David Gilroy
Buck, Sir Antony





Budgen, Nick
Hayes, J.


Burt, Alistair
Hayhoe, Barney


Butler, Hon Adam
Hayward, Robert


Carlisle, John (N Luton)
Heathcoat-Amory, David


Carlisle, Kenneth (Lincoln)
Heddle, John


Carlisle, Rt Hon M. (W'ton S)
Henderson, Barry


Carttiss, Michael
Hickmet, Richard


Cash, William
Higgins, Rt Hon Terence L.


Chalker, Mrs Lynda
Hill, James


Chapman, Sydney
Hind, Kenneth


Chope, Christopher
Hogg, Hon Douglas (Gr'th'm)


Churchill, W. S.
Holland, Sir Philip (Gedling)


Clark, Hon A. (Plym'th S'n)
Holt, Richard


Clark, Dr Michael (Rochford)
Hooson, Tom


Clark, Sir W. (Croydon S)
Hordern, Peter


Clarke, Rt Hon K. (Rushcliffe)
Howard, Michael


Colvin, Michael
Howarth, Alan (Stratf'd-on-A)


Conway, Derek
Howarth, Gerald (Cannock)


Coombs, Simon
Howell, Rt Hon D. (G'ldford)


Cope, John
Howell, Ralph (N Norfolk)


Corrie, John
Hubbard-Miles, Peter


Couchman, James
Hunt, David (Wirral)


Cranborne, Viscount
Hunt, John (Ravensbourne)


Crouch, David
Hunter, Andrew


Currie, Mrs Edwina
Jackson, Robert


Dickens, Geoffrey
Jenkin, Rt Hon Patrick


Dicks, Terry
Jessel, Toby


Dorrell, Stephen
Johnson Smith, Sir Geoffrey


Douglas-Hamilton, Lord J.
Jones, Gwilym (Cardiff N)


Dover, Den
Jones, Robert (W Herts)


du Cann, Rt Hon Edward
Jopling, Rt Hon Michael


Dunn, Robert
Joseph, Rt Hon Sir Keith


Durant, Tony
Kellett-Bowman, Mrs Elaine


Dykes, Hugh
Kershaw, Sir Anthony


Evennett, David
Key, Robert


Fairbairn, Nicholas
King, Roger (B'ham N'field)


Fallon, Michael
King, Rt Hon Tom


Farr, Sir John
Knight, Gregory (Derby N)


Favell, Anthony
Knight, Mrs Jill (Edgbaston)


Fenner, Mrs Peggy
Knox, David


Finsberg, Sir Geoffrey
Lamont, Norman


Fletcher, Alexander
Lang, Ian


Fookes, Miss Janet
Latham, Michael


Forman, Nigel
Lawler, Geoffrey


Forsyth, Michael (Stirling)
Lawson, Rt Hon Nigel


Forsythe, Clifford (S Antrim)
Lee, John (Pendle)


Forth, Eric
Leigh, Edward (Gainsbor'gh)


Fowler, Rt Hon Norman
Lennox-Boyd, Hon Mark


Fox, Marcus
Lester, Jim


Franks, Cecil
Lewis, Sir Kenneth (Stamf'd)


Fraser, Peter (Angus East)
Lightbown, David


Freeman, Roger
Lilley, Peter


Gale, Roger
Lloyd, Ian (Havant)


Galley, Roy
Lloyd, Peter, (Fareham)


Gardiner, George (Reigate)
Lord, Michael


Gardner, Sir Edward (Fylde)
Luce, Richard


Gilmour, Rt Hon Sir Ian
Lyell, Nicholas


Glyn, Dr Alan
McCrindle, Robert


Goodhart, Sir Philip
McCurley, Mrs Anna


Gorst, John
Macfarlane, Neil


Gow, Ian
MacGregor, John


Gower, Sir Raymond
MacKay, Andrew (Berkshire)


Grant, Sir Anthony
MacKay, John (Argyll &amp; Bute)


Greenway, Harry
McNair-Wilson, P. (New F'st)


Gregory, Conal
McQuarrie, Albert


Griffiths, E. (B'y St Edm'ds)
Madel, David


Griffiths, Peter (Portsm'th N)
Major, John


Grist, Ian
Malins, Humfrey


Ground, Patrick
Malone, Gerald


Grylls, Michael
Maples, John


Gummer, John Selwyn
Marland, Paul


Hamilton, Hon A. (Epsom)
Marlow, Antony


Hamilton, Neil (Tatton)
Marshall, Michael (Arundel)


Hanley, Jeremy
Mates, Michael


Hannam, John
Mather, Carol


Hargreaves, Kenneth
Maude, Hon Francis


Harris, David
Mawhinney, Dr Brian


Haselhurst, Alan
Maxwell-Hyslop, Robin


Hawkins, C. (High Peak)
Mayhew, Sir Patrick


Hawksley, Warren
Mellor, David






Merchant, Piers
Shepherd, Colin (Hereford)


Meyer, Sir Anthony
Shepherd, Richard (Aldridge)


Miller, Hal (B'grove)
Shersby, Michael


Mills, Iain (Meriden)
Silvester, Fred


Mills, Sir Peter (West Devon)
Sims, Roger


Miscampbell, Norman
Skeet, T. H. H.


Mitchell, David (NW Hants)
Smith, Sir Dudley (Warwick)


Moate, Roger
Smith, Tim (Beaconsfield)


Molyneaux, Rt Hon James
Soames, Hon Nicholas


Monro, Sir Hector
Speed, Keith


Montgomery, Fergus
Speller, Tony


Moore, John
Spence, John


Morrison, Hon C. (Devizes)
Spencer, Derek


Morrison, Hon P. (Chester)
Spicer, Jim (W Dorset)


Mudd, David
Spicer, Michael (S Worcs)


Murphy, Christopher
Squire, Robin


Neale, Gerrard
Stanbrook, Ivor


Needham, Richard
Stanley, John


Nelson, Anthony
Steen, Anthony


Neubert, Michael
Stern, Michael


Newton, Tony
Stevens, Lewis (Nuneaton)


Nicholls, Patrick
Stevens, Martin (Fulham)


Normanton, Tom
Stewart, Allan (Eastwood)


Norris, Steven
Stewart, Andrew (Sherwood)


Onslow, Cranley
Stewart, Ian (N Hertf'dshire)


Oppenheim, Phillip
Stokes, John


Oppenheim, Rt Hon Mrs S.
Stradling Thomas, J.


Osborn, Sir John
Sumberg, David


Ottaway, Richard
Tapsell, Peter


Page, Sir John (Harrow W)
Taylor, John (Solihull)


Page, Richard (Herts SW)
Taylor, Teddy (S'end E)


Parkinson, Rt Hon Cecil
Temple-Morris, Peter


Parris, Matthew
Terlezki, Stefan


Patten, Christopher (Bath)
Thatcher, Rt Hon Mrs M.


Patten, John (Oxford)
Thomas, Rt Hon Peter


Pattie, Geoffrey
Thompson, Donald (Calder V)


Pawsey, James
Thorne, Neil (Ilford S)


Peacock, Mrs Elizabeth
Thornton, Malcolm


Percival, Rt Hon Sir Ian
Thurnham, Peter


Pollock, Alexander
Townend, John (Bridlington)


Porter, Barry
Tracey, Richard


Powell, Rt Hon J. E. (S Down)
Trippier, David


Powell, William (Corby)
Trotter, Neville


Powley, John
Twinn, Dr Ian


Prentice, Rt Hon Reg
van Straubenzee, Sir W.


Price, Sir David
Vaughan, Sir Gerard


Prior, Rt Hon James
Viggers, Peter


Proctor, K. Harvey
Waddington, David


Pym, Rt Hon Francis
Walden, George


Raffan, Keith
Walker, Cecil (Belfast N)


Rathbone, Tim
Walker, Bill (Tside N)


Rees, Rt Hon Peter (Dover)
Walker, Rt Hon P. (W'cester)


Renton, Tim
Waller, Gary


Rhodes James, Robert
Walters, Dennis


Rhys Williams, Sir Brandon
Ward, John


Ridley, Rt Hon Nicholas
Wardle, C. (Bexhill)


Ridsdale, Sir Julian
Warren, Kenneth


Rifkind, Malcolm
Watson, John


Roberts, Wyn (Conwy)
Watts, John


Robinson, Mark (N'port W)
Wells, Sir John (Maidstone)


Roe, Mrs Marion
Wheeler, John


Ross, Wm. (Londonderry)
Whitney, Raymond


Rossi, Sir Hugh
Wiggin, Jerry


Rost, Peter
Wilkinson, John


Rowe, Andrew
Wolfson, Mark


Ryder, Richard
Wood, Timothy


Sackville, Hon Thomas
Woodcock, Michael


Sainsbury, Hon Timothy
Yeo, Tim


St. John-Stevas, Rt Hon N.
Young, Sir George (Acton)


Sayeed, Jonathan
Younger, Rt Hon George


Scott, Nicholas



Shaw, Giles (Pudsey)
Tellers for the Noes:


Shaw, Sir Michael (Scarf)
Mr. Robert Boscawen and


Shelton, William (Streatham)
Mr. Tristan Garel-Jones.

Question accordingly negatived.

Main question put:—

The House divided: Ayes 343, Noes 198.

Division No. 39]
[10.13 pm


AYES


Adley, Robert
Fallon, Michael


Aitken, Jonathan
Farr, Sir John


Alexander, Richard
Favell, Anthony


Alison, Rt Hon Michael
Fenner, Mrs Peggy


Amery, Rt Hon Julian
Finsberg, Sir Geoffrey


Amess, David
Fletcher, Alexander


Ancram, Michael
Fookes, Miss Janet


Arnold, Tom
Forman, Nigel


Ash by, David
Forsyth, Michael (Stirling)


Aspinwall, Jack
Forsythe, Clifford (S Antrim)


Atkins, Rt Hon Sir H.
Forth, Eric


Atkins, Robert (South Ribble)
Fowler, Rt Hon Norman


Atkinson, David (B'm'th E)
Fox, Marcus


Baker, Nicholas (N Dorset)
Franks, Cecil


Baldry, Tony
Fraser, Peter (Angus East)


Banks, Robert (Harrogate)
Freeman, Roger


Beggs, Roy
Fry, Peter


Bellingham, Henry
Gale, Roger


Bennett, Sir Frederic (T'bay)
Galley, Roy


Best, Keith
Gardiner, George (Reigate)


Bevan, David Gilroy
Gardner, Sir Edward (Fylde)


Biffen, Rt Hon John
Glyn, Dr Alan


Biggs-Davison, Sir John
Goodhart, Sir Philip


Blackburn, John
Gorst, John


Blaker, Rt Hon Sir Peter
Gow, Ian


Body, Richard
Gower, Sir Raymond


Bonsor, Sir Nicholas
Grant, Sir Anthony


Bottomley, Peter
Greenway, Harry


Bottomley, Mrs Virginia
Gregory, Conal


Bowden, A. (Brighton K'to'n)
Griffiths, E. (B'y St Edm'ds)


Bowden, Gerald (Dulwich)
Griffiths, Peter (Portsm'th N)


Braine, Sir Bernard
Grist, Ian


Brandon-Bravo, Martin
Ground, Patrick


Bright, Graham
Grylls, Michael


Brinton, Tim
Gummer, John Selwyn


Brittan, Rt Hon Leon
Hamilton, Hon A. (Epsom)


Brooke, Hon Peter
Hamilton, Neil (Tatton)


Brown, M. (Brigg &amp; Cl'thpes)
Hanley, Jeremy


Browne, John
Hannam, John


Bruinvels, Peter
Hargreaves, Kenneth


Bryan, Sir Paul
Harris, David


Buck, Sir Antony
Harvey, Robert


Budgen, Nick
Haselhurst, Alan


Burt, Alistair
Hawkins, C. (High Peak)


Butler, Hon Adam
Hawksley, Warren


Carlisle, John (N Luton)
Hayes, J.


Carlisle, Kenneth (Lincoln)
Hayhoe, Barney


Carlisle, Rt Hon M. (W'ton S)
Hayward, Robert


Carttiss, Michael
Heathcoat-Amory, David


Cash, William
Heddle, John


Chalker, Mrs Lynda
Henderson, Barry


Chapman, Sydney
Hickmet, Richard


Chope, Christopher
Higgins, Rt Hon Terence L.


Churchill, W. S.
Hill, James


Clark, Hon A. (Plym'th S'n)
Hind, Kenneth


Clark, Dr Michael (Rochford)
Hogg, Hon Douglas (Gr'th'm)


Clark, Sir W. (Croydon S)
Holland, Sir Philip (Gedling)


Clarke, Rt Hon K. (Rushcliffe)
Holt, Richard


Colvin, Michael
Hooson, Tom


Conway, Derek
Hordern, Peter


Coombs, Simon
Howard, Michael


Cope, John
Howarth, Alan (Stratf'don-A)


Corrie, John
Howarth, Gerald (Cannock)


Couchman, James
Howell, Rt Hon D. (G'ldford)


Cranborne, Viscount
Howell, Ralph (N Norfolk)


Crouch, David
Hubbard-Miles, Peter


Currie, Mrs Edwina
Hunt, David (Wirral)


Dickens, Geoffrey
Hunt, John (Ravensbourne)


Dicks, Terry
Hunter, Andrew


Dorrell, Stephen
Jackson, Robert


Douglas-Hamilton, Lord J.
Jenkin, Rt Hon Patrick


Dover, Den
Jessel, Toby


du Cann, Rt Hon Edward
Johnson Smith, Sir Geoffrey


Dunn, Robert
Jones, Gwilym (Cardiff N)


Durant, Tony
Jones, Robert (W Herts)


Dykes, Hugh
Jopling, Rt Hon Michael


Evennett, David
Joseph, Rt Hon Sir Keith


Fairbairn, Nicholas
Kellett-Bowman, Mrs Elaine






Key, Robert
Pattie, Geoffrey


King, Roger (B'ham N'field)
Pawsey, James


King, Rt Hon Tom
Peacock, Mrs Elizabeth


Knight, Gregory (Derby N)
Percival, Rt Hon Sir Ian


Knight, Mrs Jill (Edgbaston)
Pollock, Alexander


Lamont, Norman
Porter, Barry


Lang, Ian
Powell, Rt Hon J. E. (S Down)


Latham, Michael
Powell, William (Corby)


Lawler, Geoffrey
Powley, John


Lawson, Rt Hon Nigel
Prentice, Rt Hon Reg


Lee, John (Pendle)
Price, Sir David


Leigh, Edward (Gainsbor'gh)
Proctor, K. Harvey


Lennox-Boyd, Hon Mark
Pym, Rt Hon Francis


Lester, Jim
Raffan, Keith


Lewis, Sir Kenneth (Stamf'd)
Rathbone, Tim


Lightbown, David
Rees, Rt Hon Peter (Dover)


Lilley, Peter
Renton, Tim


Lloyd, Ian (Havant)
Rhodes James, Robert


Lloyd, Peter, (Fareham)
Ridley, Rt Hon Nicholas


Lord, Michael
Ridsdale, Sir Julian


Luce, Richard
Rifkind, Malcolm


Lyell, Nicholas
Roberts, Wyn (Conwy)


McCrindle, Robert
Robinson, Mark (N'port W)


McCurley, Mrs Anna
Roe, Mrs Marion


Macfarlane, Neil
Ross, Wm. (Londonderry)


MacGregor, John
Rossi, Sir Hugh


MacKay, Andrew (Berkshire)
Rost, Peter


MacKay, John (Argyll &amp; Bute)
Rowe, Andrew


McNair-Wilson, P. (New F'st)
Ryder, Richard


McQuarrie, Albert
Sackville, Hon Thomas


Madel, David
Sainsbury, Hon Timothy


Major, John
St. John-Stevas, Rt Hon N.


Malins, Humfrey
Sayeed, Jonathan


Malone, Gerald
Scott, Nicholas


Maples, John
Shaw, Giles (Pudsey)


Marland, Paul
Shaw, Sir Michael (Scarb')


Marlow, Antony
Shelton, William (Streatham)


Marshall, Michael (Arundel)
Shepherd, Colin (Hereford)


Mates, Michael
Shepherd, Richard (Aldridge)


Mather, Carol
Shersby, Michael


Maude, Hon Francis
Silvester, Fred


Mawhinney, Dr Brian
Sims, Roger


Maxwell-Hyslop, Robin
Skeet, T. H. H.


Mayhew, Sir Patrick
Smith, Sir Dudley (Warwick)


Mellor, David
Smith, Tim (Beaconsfield)


Merchant, Piers
Soames, Hon Nicholas


Meyer, Sir Anthony
Speed, Keith


Miller, Hal (B'grove)
Speller, Tony


Mills, Iain (Meriden)
Spence, John


Mills, Sir Peter (West Devon)
Spencer, Derek


Miscampbell, Norman
Spicer, Jim (W Dorset)


Mitchell, David (NW Hants)
Spicer, Michael (S Worcs)


Moate, Roger
Squire, Robin


Molyneaux, Rt Hon James
Stanbrook, Ivor


Monro, Sir Hector
Stanley, John


Montgomery, Fergus
Steen, Anthony


Moore, John
Stern, Michael


Morrison, Hon C. (Devizes)
Stevens, Lewis (Nuneaton)


Morrison, Hon P. (Chester)
Stevens, Martin (Fulham)


Mudd, David
Stewart, Allan (Eastwood)


Murphy, Christopher
Stewart, Andrew (Sherwood)


Neale, Gerrard
Stewart, Ian (N Hertf'dshire)


Needham, Richard
Stokes, John


Nelson, Anthony
Stradling Thomas, J.


Neubert, Michael
Sumberg, David


Newton, Tony
Tapsell, Peter


Nicholls, Patrick
Taylor, John (Solihull)


Normanton, Tom
Taylor, Teddy (S'end E)


Norris, Steven
Temple-Morris, Peter


Onslow, Cranley
Terlezki, Stefan


Oppenheim, Phillip
Thatcher, Rt Hon Mrs M.


Oppenheim, Rt Hon Mrs S.
Thomas, Rt Hon Peter


Osborn, Sir John
Thompson, Donald (Calder V)


Ottaway, Richard
Thorne, Neil (Ilford S)


Page, Sir John (Harrow W)
Thornton, Malcolm


Page, Richard (Herts SW)
Thurnham, Peter


Parkinson, Rt Hon Cecil
Townend, John (Bridlington)


Parris, Matthew
Tracey, Richard


Patten, Christopher (Bath)
Trippier, David


Patten, John (Oxford)
Trotter, Neville





Twinn, Dr Ian
Wells, Sir John (Maidstone)


van Straubenzee, Sir W.
Wheeler, John


Vaughan, Sir Gerard
Whitney, Raymond


Viggers, Peter
Wiggin, Jerry


Waddington, David
Wilkinson, John


Walden, George
Wolfson, Mark


Walker, Cecil (Belfast N)
Wood, Timothy


Walker, Bill (T'side N)
Woodcock, Michael


Walker, Rt Hon P. (W'cester)
Yeo, Tim


Waller, Gary
Young, Sir George (Acton)


Walters, Dennis
Younger, Rt Hon George


Ward, John



Wardle, C. (Bexhill)
Tellers for the Ayes:


Warren, Kenneth
Mr. Robert Boscawen and


Watson, John
Mr. Tristan Garel-Jones.


Watts, John





NOES


Abse, Leo
Faulds, Andrew


Adams, Allen (Paisley N)
Field, Frank (Birkenhead)


Anderson, Donald
Fields, T. (L'pool Broad Gn)


Archer, Rt Hon Peter
Fisher, Mark


Ashley, Rt Hon Jack
Flannery, Martin


Ashton, Joe
Foot, Rt Hon Michael


Atkinson, N. (Tottenham)
Forrester, John


Bagier, Gordon A. T.
Foster, Derek


Banks, Tony (Newham NW)
Foulkes, George


Barnett, Guy
Fraser, J. (Norwood)


Barron, Kevin
Freeson, Rt Hon Reginald


Beckett, Mrs Margaret
Garrett, W. E.


Bell, Stuart
George, Bruce


Benn, Tony
Gilbert, Rt Hon Dr John


Bennett, A. (Dent'n &amp; Red'sh)
Godman, Dr Norman


Bermingham, Gerald
Gould, Bryan


Bid well, Sydney
Hamilton, James (M'well N)


Blair, Anthony
Hamilton, W. W. (Central Fife)


Boothroyd, Miss Betty
Hancock, Mr. Michael


Boyes, Roland
Hardy, Peter


Bray, Dr Jeremy
Harrison, Rt Hon Walter


Brown, Gordon (D'f'mline E)
Hart, Rt Hon Dame Judith


Brown, Hugh D. (Provan)
Hattersley, Rt Hon Roy


Brown, N. (N'c'tle-u-Tyne E)
Healey, Rt Hon Denis


Brown, R. (N'c'tle-u-Tyne N)
Heffer, Eric S.


Brown, Ron (E'burgh, Leith)
Hogg, N. (C'nauld &amp; Kilsyth)


Caborn, Richard
Holland, Stuart (Vauxhall)


Callaghan, Jim (Heyw'd &amp; M)
Home Robertson, John


Campbell, Ian
Howells, Geraint


Canavan, Dennis
Hoyle, Douglas


Carter-Jones, Lewis
Hughes, Dr. Mark (Durham)


Cartwright, John
Hughes, Robert (Aberdeen N)


Clark, Dr David (S Shields)
Hughes, Roy (Newport East)


Clarke, Thomas
Hughes, Sean (Knowsley S)


Clay, Robert
Hughes, Simon (Southwark)


Clwyd, Mrs Ann
Hume, John


Cocks, Rt Hon M. (Bristol S.)
Janner, Hon Greville


Cohen, Harry
Jenkins, Rt Hon Roy (Hillh'd)


Coleman, Donald
John, Brynmor


Concannon, Rt Hon J. D.
Kennedy, Charles


Conlan, Bernard
Kilfedder, James A.


Cook, Frank (Stockton North)
Kilroy-Silk, Robert


Corbyn, Jeremy
Kinnock, Rt Hon Neil


Cowans, Harry
Kirkwood, Archy


Cox, Thomas (Tooting)
Lamond, James


Craigen, J. M.
Leadbitter, Ted


Crowther, Stan
Leighton, Ronald


Cunningham, Dr John
Lewis, Ron (Carlisle)


Davies, Ronald (Caerphilly)
Lewis, Terence (Worsley)


Davis, Terry (B'ham, H'ge H'l)
Litherland, Robert


Deakins, Eric
Lloyd, Tony (Stretford)


Dixon, Donald
Lofthouse, Geoffrey


Dormand, Jack
Loyden, Edward


Douglas, Dick
McCartney, Hugh


Dubs, Alfred
McCrea, Rev William


Duffy, A. E. P.
McDonald, Dr Oonagh


Dunwoody, Hon Mrs G.
McKay, Allen (Penistone)


Eadie, Alex
McKelvey, William


Eastham, Ken
Maclennan, Robert


Evans, John (St. Helens N)
McNamara, Kevin


Ewing, Harry
McTaggart, Robert


Fatchett, Derek
McWilliam, John






Madden, Max
Redmond, M.


Marek, Dr John
Rees, Rt Hon M. (Leeds S)


Marshall, David (Shettleston)
Richardson, Ms Jo


Maynard, Miss Joan
Roberts, Ernest (Hackney N)


Meacher, Michael
Robertson, George


Meadowcroft, Michael
Robinson, G. (Coventry NW)


Michie, William
Robinson, P. (Belfast E)


Mikardo, Ian
Rogers, Allan


Millan, Rt Hon Bruce
Rooker, J. W.


Miller, Dr M. S. (E Kilbride)
Ross, Ernest (Dundee W)


Morris, Rt Hon A. (W'shawe)
Ross, Stephen (Isle of Wight)


Morris, Rt Hon J. (Aberavon)
Rowlands, Ted


O'Brien, William
Ryman, John


O'Neill, Martin
Sedgemore, Brian


Orme, Rt Hon Stanley
Sheldon, Rt Hon R.


Paisley, Rev Ian
Shore, Rt Hon Peter


Park, George
Short, Ms Clare (Ladywood)


Parry, Robert
Short, Mrs R.(W'hampt'n NE)


Patchett, Terry
Silkin, Rt Hon J.


Pavitt, Laurie
Skinner, Dennis


Pendry, Tom
Smith, C.(Isl'ton S &amp; F'bury)


Pike, Peter
Smith, Rt Hon J. (M'kl'ds E)


Powell, Raymond (Ogmore)
Snape, Peter


Prescott, John
Soley, Clive


Radice, Giles
Spearing, Nigel


Randall, Stuart
Stewart, Rt Hon D. (w Isles)





Stott, Roger
Welsh, Michael


Strang, Gavin
White, James


Straw, Jack
Wigley, Dafydd


Thomas, Dafydd (Merioneth)
Williams, Rt Hon A.


Thompson, J. (Wansbeck)
Wilson, Gordon


Thorne, Stan (Preston)
Winnick, David


Tinn, James
Woodall, Alec


Torney, Tom
Wrigglesworth, Ian


Wainwright, R.
Young, David (Bolton SE)


Wallace, James



Wardell, Gareth (Gower)
Tellers for the Noes:


Wareing, Robert
Mr. John Maxton and


Weetch, Ken
Mr. Robin Corbett.

Question accordingly agreed to.

Resolved,
That this House approves the Autumn Statement presented by Mr. Chancellor of the Exchequer on 12th November; welcomes the prospect of continuing low inflation and steady growth as the basis for maintaining the trend of rising employment; and congratulates Her Majesty's Government on keeping the public expenditure planning total for 1985–1986within the figure publishing in the 1984 public Expenditure White Paper (cmnd.9143).

BUSINESS OF THE HOUSE

Ordered,
That, at this day's sitting, the Elections (Northern Ireland) Bill may be proceeded with, though opposed, until any hour. —[Mr. Lang.]

Orders of the Day — Elections (Northern Ireland) Bill

As amended, considered.

New Clause 1

DURATION AND EXPIRY

'This Act shall cease to have effect at the end of the period of three years beginning with the date on which it is passed.'. —[Mr. J. Enoch Powell.]

Brought up, and read the First time.

Mr. J. Enoch Powell: I beg to move, That the clause be read a Second time.
At every stage of the Bill so far, the Government have been at pains to emphasise its experimental and tentative nature. The Parliamentary Under-Secretary of State for Northern Ireland, who is now seated at the Dispatch Box, has referred to the Government, in piloting this legislation, as sailing uncharted waters. Both he and his right hon. Friend have been very specific. For example, in Committee the Parliamentary Under-Secretary of State said:
We now have this new scheme, and we are right to test that.
It is essentially an experimental operation. Later he said:
This is new territory." — [Official Report, 28 November 1984; Vol. 68, c. 1022–6.]
10.30 pm
The Secretary of State himself was very specific in acknowledging the readiness of the Department and the Government to reconsider the provisions of the Bill in the light of the experience of its working. I remind the House of the words that he used. He said:
We believe…that the scheme in the Bill is the soundest one that can be put before the Committee at this stage. If, in the light of later experience, it proves to need change, it should be changed. All hon. Members who represent Northern Ireland constituencies will be alert to that need and to that experience.
With reference to the amendment then before the Committee, he continued:
However, we believe now, having listened to all the arguments with care, that the scheme in the Bill is preferable to the one in the amendment."—[Official Report, 28 November 1984; Vol. 68, c. 992.]
I emphasise the undertaking—for such it is—of the Secretary of State that if, in the light of later experience, the measure now before us proves to need change it should be changed. I cast no doubt or aspersion whatever on the candour of the Secretary of State and his colleague when they made those statements. I am sure that they are entirely sincere in saying that if, after a test of one, two or three elections, the legislation in its present form is found to be defective it will be changed.
It is one thing, however, for the Secretary of State to make that assertion in all good faith in the House in 1984, but it is quite a different thing for the same Secretary of State or perhaps another—one never knows, once the regular two years have elapsed it may well be a different Secretary of State—to say to his colleagues in 1986, "I am sorry to have to admit to you that we made rather a mess of that legislation in 1984", to explain that there were serious defects that had caused grave embarrassment to the Government in the working of the Elections (Northern Ireland) Act 1984 and to ask for the Cabinet's assent and


the assistance of the legislation committee of Cabinet to bring forward an Elections (Northern Ireland) (Amendment) Bill. I do not know what kind of reception he will get from the Leader of the House at that time or what kind of handling he will get in the legislation committee, but it is not the kind of experience for which Ministers readily volunteer — to go back to their colleagues, admit to having made a number of bosh shots and to ask for a further legislative slot in the next Session to put things right.
My right hon. and hon. Friends and I wish to save the Secretary of State from any such embarrassment. Our desire to do so is the more lively in that our perception of the defects of the Bill has been more realistic and acute than that of Ministers. Those of us who have been in the Province since the Bill was last considered in Committee have been asked about its provisions and have discussed them with our constituents. Our explanations have been greeted with hoots of laughter—not at our expense, but at the expense of the Government — at the idea that anyone could imagine that such a system could prove workable in practice. Usually our constituents were still laughing when we left them.
The Secretary of State will not find it so agreeable, however, when our predictions are proved true at the next election and it turns out that the provisions of the Bill have been the means of denying many thousands of electors in Northern Ireland the opportunity to exercise the franchise to which they had every reason to believe that they were entitled.
Therefore, we invite the Secretary of State to accept the assistance which we proffer in the new clause. Since the Bill is, on his own showing, experimental and a test, since he has determined that it shall be changed if change is needed, and it will be readily acknowledged that there are precedents in Northern Ireland legislation for an Act coming to a determinate conclusion—indeed, I got the working of the new clause from another Northern Ireland Act—let the Secretary of State acknowledge this. After that he will he fully within his rights in introducing a new Bill, if he wants one at all—that is extremely doubtful —which will be free from the defects of the present Bill. The only safeguard that the House can have is that the Secretary of State will be in a position to carry out the undertaking he has given. It is also the only safeguard, as we have reached this stage in the Bill, that those whom we represent can have that they will be liberated in a measurable time from the inconveniences that the provisions will impose on them.
It may be thought and it may be a criticism—if so, we may be vulnerable to it—that we have allowed this legislation too long a life in our new clause. We have allowed it three years, where it may fairly be argued that the experience of one election—that which will occur in May 1985 — would be sufficient to throw into sharp relief the defects of the Act. Nevertheless, to show a desire to meet the Secretary of State, to show that we are not using the new clause simply as an alternative means of defeating his legislation, it seemed right to proffer a period of three years, since in that period there may well be both a parliamentary and a local government election. The two forms of election can be tested under the provisions of the Bill. That is the reason for the term of three years, which my right hon. Friends and I sought fit to suggest in the new clause.
If, when the Minister replies, he makes it clear that, although he wants either a shorter or, though I hope not, a longer period, he accepts the principle that since this is experimental it should be an experimental Bill, naturally we would be prepared to consider it. He will be on weak ground if he argues against making this a Bill of temporary duration. He will be on extremely weak ground in doing so for we shall remind him that the Province is at present governed by an Act that is renewed annually. Let him not, therefore, say that this comparatively minor piece of legislation should go on the statute book en permanence, failing such recantation or second thoughts that he or subsequent Ministers may have. Let him admit that if it is experimental, it should take its place among experimental Acts of definite duration so that the House will have the opportunity of reconsidering the position in three years' time from the passing of the Act.
It is only fair to the one part of the United Kingdom on which the experiment is being conducted that the House should be not merely given the promise that changes will be considered if necessary, but that the House will survey the experience in the working of the legislation. As the House will be aware, it is part of our grievance that the experiment is not being performed upon the body corporate of the whole nation, but only upon a part—the Province. I hope that the old latin tag
experimentum in vili corpore
is not in the mind of the Government. They thought it a cheap means of carrying out an experiment to try it on Northern Ireland. If the House of Commons insists on trying this on Northern Ireland, at least it should say that after the trial the House will reconsider the experience which has been gained, an experience to which my right hon. and hon. Friends and I look forward with no joyous anticipation. I hope that we shall find the Minister susceptible to the arguments for the new clause.

Mr. William Ross: The objections that we have voiced throughout the passage of the legislation remain and will remain even after it is passed into law, because we think that it is defective. We believe that it will not do the job that the Minister hopes that it will do. The main defect is that there is no positive identification of individuals who are standing before the officers in the polling station. There are no photographs and no system of a single card which ties the individual to the name on the register. We believe, as my right hon. Friend the Member for South Down (Mr. Powell) has said, that a measure as experimental as this should not have an unduly long life before the Minister has to return to the House and give an account of the workings of the Act, and explain why he believes that the ill that occurred did occur.
We are faced not just with the difficulty of stopping the personation that Sinn Fein attempts We are also faced with the problem of ensuring that all legitimate electors can cast their vote.
As one talks to those in the constituencies who are involved in these matters—those who organise for the party of which we, at least, are members — one discovers that they share the misgivings that have been expressed so clearly from this Bench.
There is anxiety that the legislation will not just fail in its stated objective but that the other edge of this two-edged sword will inhibit the legitimate elector from casting his vote.
We believe that those who framed the legislation have greatly underestimated the ruthlessness of those who will seek to bypass it—the IRA and the fellow travellers. One has only to consider the activities displayed by those vicious people in Northern Ireland to realise that. In the city of Londonderry, where of course personation is rife on the west bank, there was a punishment shooting only a week or two ago of four individuals whom the IRA decided were guilty of stepping out of line, in the opinion of Sinn Fein or the IRA. That is the type of threat that is held over the inhabitants of that part of the United Kingdom; that is the type of punishment and trial that people can expect.
When that anarchy and ruthlessness is carried into the militaristic personation that we have seen in Northern Ireland one wonders why this weak Bill was presented at all. It is a sop to those who are calling for something to be done.

Mr. J. Enoch Powell: The hon. Member for Foyle (Mr. Hume) is not here.

Mr. Ross: He rarely is. The Government have failed to seize the nettle of demanding that everyone in Northern Ireland carries a proper identity card at all times.
I find annoying the inherent belief that people who are members of political parties, and who thereby make a target of themselves in Northern Ireland, are unwilling to stand up against the gunmen. That is not true. We were told by the hon. Member for Foyle (Mr. Hume), during one of his rare visits at the very beginning of the passage of this legislation, that on the first morning of an election 50 out of 700 electors on the roll were turned away for attempted personation. That reflects very great credit on the party of the hon. Member for Foyle. It reflects great credit on the capabilities and courage of his party workers, some of whom suffered afterwards, as he explained to us. It is also a denial of the belief that the people who fight and work for political parties in Northern Ireland are willing to stand up against the gunmen and the killers.

Mr. Deputy Speaker (Mr. Paul Dean): Order. I must point out to the hon. Gentleman that the new clause deals with the duration of the legislation. The hon. Gentleman is now going some way away from that point.

Mr. Ross: You will appreciate, Mr. Deputy Speaker, that the fears we have expressed about trying to shorten the life of the Bill through the new clause arises out of the events that I have attempted to describe to the House. Some hon. Members were not present during our previous discussions and I should not wish there to be a Division on this matter without those hon. Members being made fully aware of the background and of the fears which we all share. It was for that reason that I digressed from the narrow point expressed in the new clause. If the people of Northern Ireland vote under this legislation without a time limit being imposed, they will find that they are saddled for ever with an ineffective instrument of law. Great reluctance is shown by any Government or Minister to admit that they have got it wrong, even when it is apparent to all involved in the execution of the legislation that they have got it widely wrong. Since the legislation applies only to Northern Ireland you will appreciate, Mr. Deputy

Speaker, that the majority of hon. Members in this House who never visit Northern Ireland during elections will not have detailed, first hand knowledge of the practical working of the legislation. I said at an earlier stage that a good sermon is always worth repeating two, three or four times, especially when there is a fresh audience—as, in some measure, we have this evening.

Rev. Ian Paisley: There are plenty of sinners here.

Mr. Ross: The right hon. Member for Antrim, North refers to sinners, but he will forgive me if I leave conversion to him and to his colleagues. They have taken on board the task of converting the sinners of this world. They have not yet been very successful with Sinn Fein, but one always lives in hope. The problems which will be encountered in trying to stop personation will not change. Although the Bill relates only to Westminster elections, we are very well aware that the first test will be at the local government elections in May 1985, to be followed 18 months later by elections to the Stormont Assembly. Only after that, apart from a strange mischance, will the matter be tested in a simple majority Westminster election.
One has to question whether by introducing this measure in an attempt to cut down the apparent support for Sinn Fein the Government have got it wrong. I believe that they have. If we make dead sure that after three years they must come back to the House with another Bill they will be able to say that the past is over and done with and will escape the strictures of the House for having got it wrong the first time. They can then introduce a Bill, should this be necessary, which will be effective and do the job. They will find that the learning process which will take place over this period of three years will reveal what past statistics have already revealed.
Those who run in terror from an apparent increase in the Sinn Fein vote run from a myth, a will o' the wisp that does not exist. That electoral support has fluctuated over the past three decades. The true Sinn Fein vote in Northern Ireland is between 70,000 and 120,000. It has not changed, and I see no reason to expect a massive change, unless the SDLP collapses, in which case one would expect the Sinn Fein to increase to its potential maximum of 150,000 or 160,000. But that would happen whether or not we had passed the Bill.
The Sinn Fein vote does not depend only on personation. We are told that one fifth of the Sinn Fein votes were personated votes. I believe that the proportion was much less, but I believe that the hard core Sinn Fein vote will remain and will fluctuate only according to the candidate or issues and the feeling in the country at election time.
We say that three years is long enough for an experimental period. Indeed, it may be too long for some of us folk who will have to bear the brunt of the experiment, but we are prepared to give it three years, in the hope that after that time the Government will take careful note of what has happened and will carry out a review and introduce effective legislation.
I do not doubt that the experience will teach us a few lessons, but the Government have much more to learn than we have. I hope that the Parliamentary Under-Secretary will ensure that he and his officials are assiduous in the learning process.
The Bill was produced by people who thought that they knew about personation, but they have never learnt about


it at first hand. They have to go through a learning process, absorb lessons and translate them into effective legislation. I hope that after the local government, Assembly and parliamentary elections, the Government will look at what has been said in the debate. We cannot afford to have ineffective legislation. We must have a law to stop the massive personation that has taken place.
Even if personation produced not one fifth, but only one tenth of Sinn Fein's votes, which is probably closer to the mark, it is still massive personation. It proves what tremendous and willing support Sinn Fein receives. If it did not have that support, the terrorism would not succeed. The terrorism, the violence and the kneecapping—

Mr. Deputy Speaker: Order. the hon. Gentleman is straying from the new clause again. I hope that he will address his remarks to the time factor, which is what the debate is about.

Mr. Ross: I was trying to draw attention to the fact that the Government will go through a learning process during the three years. I hope that the lessons will be learnt so that when officials put legislation before Ministers next time, not only will they have framed it better, but the Ministers will cast a more critical eye over it.
I am worried. The legislation will cause great difficulties for the honest and some difficulties, but not sufficient, for the wicked. The period of three years is more than enough to assess the Bill's shortcomings in full and to ensure that that which follows is effective, workable and practical and will be praised instead of condemned, not only by my hon. Friends but by those who will have to live and operate within that framework of the law in Northern Ireland.

Mr. Peter Robinson: We seem to have rehearsed most of the arguments during the debates that have taken place in the House on this subject. Therefore, I address myself briefly to the new clause which was moved by the right hon. Member for South Down (Mr. Powell).
The clause certainly has reason on its side. Some of us might consider it to be over-generous, in that our conviction throughout the debates has been that the Bill, which started slowly in the Government's mind some two years ago, almost seemed to be forgotten, and then was suddenly rushed upon us and had to be put through the House post haste. The unnecessary rush on the part of the Government brought with it some unfortunate wording which the Government have felt unable to change. The consequence of that is that we shall have, at the end of the day, an Act which will not work.
The Act will not work, because the fear that causes presiding officers to ignore personation will be the same when the Bill is on the statute book. Those presiding officers are aware of personation. They know that it is taking place under the existing law in Northern Ireland. The prescribed documents suggested by the Minister in the Bill will not provide them with evidence that they did not have before. Those officers see the faces before them. The problem has always been that they are afraid to act. Therefore, the Act will fail to curb the personation and vote-stealing of Sinn Fein.
I do not doubt for one moment the Government's purpose, motivation and intent. They wish to curb personation, and everyone in the House would wish to curb personation. But the Bill will not do that. The need

will still arise. After the May local government elections, we shall find that personation is still taking place. But we shall find out much more than that. We shall find out that many hundreds of thousands of people in Northern Ireland, who normally come out rightly and genuinely and sincerely to cast their vote, will have been disenfranchised.
That being the case, I know that the Minister, who is a fair-minded man, will realise at once that this Bill was hasty, ill-prepared and must be removed from the statute book and replaced, if necessary, by some other form of legislation.
Having recognised that a lower poll is caused by the Bill, the Minister will also hear the calls of discrimination that will come from one end of the Province to the other from people who have not been allowed to vote and who believe that they were entitled to do so. That will cast aspersions on the authorities who have been conducting the election and it will cast doubt on the result of the election.
The third thing that the Minister may see—I hope he does not, but knowing the temper in some areas of Northern Ireland I fear that he may — is that the legislation will cause some sort of unrest, perhaps disorder.
Taking those three consequences of the legislation together, I believe that the Minister will be forced, after just the first election, to think again. The May election will be held under the obnoxious single transferable vote system, under which people may have to list candidates from first to twelfth in order of preference. The Minister may think that that is the cause of the discontent. He may want to try again. I hope that he will not, but, if he does. the new clause gives him the opportunity to do so.
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I have no reluctance in supporting the new clause. I trust that the Minister will scrutinise closely what happens on 15 May 1985 and will then not be reluctant to admit that the legislation was wrong. Being the man that he is, I know that he will be prepared to admit it. By then, the case will have been proved.

Sir John Biggs-Davison: I hope—admittedly without much faith— that the Government will be sympathetic towards the new clause. In about three minutes I should like to adduce three advantages that would flow from accepting it.
First, if it be true — as has been said by hon. Gentlemen representing Northern Ireland constituencies —that the measure will not work, a time limit upon it will be of value because it would then expire and something else could replace it.
Secondly, a limit upon the duration of the measure will give time for a single identity document to be produced for all the inhabitants of the United Kingdom. I shall not repeat the arguments that I presented at an earlier stage of the passage of the Bill, I said that such a document would not be available overnight, but a single identity document for all the inhabitants of this country could certainly be made available within a period of three years to replace — if the measure were to be retained — the array of documents now listed in amendment No. 5.
Thirdly, if it be found after three years that the measure is not necessary or that a different measure is required,


such legislation could be incorporated in amendments to the Representation of the People Act, and applied to the United Kingdom as a whole.

Mr. Roy Beggs: With my Ulster Unionist colleagues, I trust that it win be possible to include new clause 1 in the Bill. It is widely accepted that massive personation is practised by Sinn Fein and has distorted election results in the past. To permit that dishonest practice to continue to influence future results could threaten and bring into disrepute the whole democratic process in Northern Ireland.
I do not believe that the Bill will have much effect in preventing Sinn Fein from attempting to personate in the future. As has been clearly established, personation is widely practised in the nationalist and republican areas of Northern Ireland. The same political activists will test the new legislation. There is no doubt about that. That is why the Bill in its present form should not be permitted to last for more than three years. We hope that changes that we have advised will be made then.
The Bill is an attempt to correct public impressions nationally and internationally which have been created by the large numbers of votes that have been cast for Sinn Fein. It can also be seen as an attempt to identify more clearly in future elections the true number of voters who, by supporting Sinn Fein, encourage the murder and maiming of members of our security forces, and as an attempt to ensure that all possible votes can be cast for the SDLP rather than stolen and cast for Sinn Fein. Sinn Fein voters do not have to pull a trigger or detonate a land mine. Their votes approve past murders and bombings, encourage future murders of innocent Protestant farmers and innocent Protestants in their place of worship and contribute to higher unemployment by the bombing of economic targets.
To ensure a fair opportunity for legitimate voters to cast their votes in elections, it is sad that Northern Ireland is being treated differently from the rest of the United Kingdom, despite the fact that attention has been drawn to suspected personation in Great Britain by the hon. Member for Leicester, East (Mr. Bruinvels). We Ulster Unionists have nothing to gain from the Bill. Indeed, some of us could lose as a result of voters being required to present evidence for qualification to vote. It is quite likely that that will deter many from voting.
It is reasonable and sensible that the Act should cease to have effect three years after it takes effect. That time will allow it to be applied to future district council elections and possibly future Westminster elections. The results of those elections should provide adequate information for analysis. In the interests of maintaining a fair democratic process, there should be a review after no more than three years. Such a review would permit the Government to include the advice already given by Ulster Unionists, which has not been included in the Bill. As usual, time will prove us and our advice right. That has often happened before. I do not doubt that, if a review is granted, the advice that we have offered today will be included and applied to the United Kingdom as a whole. I support new clause 1 and regret that an identity card with a photograph is not listed as a prescribed document.

Rev. William McCrea: There have been clear expressions of dissatisfaction with the Bill. Clear

misgivings have been expressed by right hon. and hon. Members and many commentators. They do not believe that it is practical or that it will work as desired. I have listened carefully to the arguments in favour of the Bill that have been presented by the Secretary of State and Ministers, and I shall continue to do so until the House divides. I fear that they are the only people who believe that this legislation will be a suitable way to stop vote-stealing. Few hon. Members who have spoken have expressed satisfaction with the legislation. Those hon. Members who have listened to the debate perceive that there are many defects in it.
It is only proper that we state once again that the purpose of the Bill is honourable. I have no doubt about the sincerity of the Secretary of State and his Ministers who are suggesting legislation to deal with personation or vote-stealing. All have clearly stated that the purpose of the Bill is to stop vote-stealing, but, as hon. Members on both sides of the House have said on several occasions, the very opposite could be the result when, at the end of the day, the votes have been cast. Honest, decent citizens may be hindered in the free exercise of their vote, and the result of the election may be adversely affected. Rather than stopping Sinn Fein from getting its results in the election, it may be found by one party that the new legislation will work in Sinn Fein's favour, and many honest, decent citizens will have had further impediments put in their way.
Sinn Fein is a very committed group of people. As has been said, they are prepared to spend 20 years in a prison cell for committing murder. What is to stop them from trying to steal votes next election day? However, other parties, which seek an honourable and decent way to encourage people to exercise their vote, may find that people who remember facing an election every year in Northern Ireland, will become fed up with the measures in the legislation that will probably be voted through this evening.
The legislation will be voted through even though most of those who will vote for it will not have listened to any argument from the Ulster Unionists or the Democratic Unionists, because they were not here to listen to them.

Mr. William Ross: The hon. Member for Foyle (Mr. Hume) is not here.

Rev. William McCrea: The hon. Gentleman is correct.
Therefore, hon. Members cannot vote with a clear conscience and say that they have listened to the arguments and, with a free and open mind, made a decision. This legislation has been decided by the Government for good or ill, for the people of Northern Ireland, whether or not it is the proper way to carry out the legislative process in the best interests of the people of Northern Ireland. I do not believe that it is.
What voice is the Minister listening to? He has listened to what has been said, but not to many of his right hon. and hon. Friends, because only a few of them are here or have spoken through the passage of the Bill. He has not listened to many of the Liberal or SDP Members, because their Benches are completely empty. As to listening to any argument on the matter from Her Majesty's Opposition, the lonely figure sitting on his own on the Opposition Front Bench proves the interest that they have in whether the proper exercise of the vote in Northern Ireland will be


hindered by the legislation. The absence of Opposition Members demonstrates clearly that they could not care less.
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So I ask the simple question: to whom is the Minister listening? Of course, we are told that one of the parties that the legislation is designed to help is the SDLP. If that was really felt to be so—because certainly it was not in the interests of the Unionist parties that the legislation was introduced—one would have expected to see the hon. Member for Foyle (Mr. Hume) in his place. However, on the numerous occasions that we have discussed these matters he has not found it interesting enough to be here. But, of course, the hon. Gentleman appreciates that there is no need for him to be here, because the legislation will be put through the House in any event, to save his neck, so he can go somewhere else to do something else and not bother to be here to listen to our debates.

Mr. Beggs: rose—

Mr. Deputy Speaker: Order. I hope that the hon. Member for Mid-Ulster (Rev. William McCrea) is about to say why he feels that the legislation should cease to have effect after three years.

Rev. William McCrea: I thank you for drawing that to my attention, Mr. Deputy Speaker. One reason is that no' one is interested in it. That, as I have pointed out, is demonstrated by the absence of right hon. and hon. Members from the debate. Indeed, it is one reason why the legislation should not be passed at all. In my view, three years is too long. I should be delighted, as, I am sure, would other hon. Members of the Unionist family, if the Minister said that, having listened to the argument and the complete dissatisfaction expressed by a majority of the right hon. and hon. Members present, he had had second thoughts and no longer wanted to push through the legislation. However, that is too much to ask.
The proposed new clause is a reasonable one if the Minister is going ahead with the legislation because, if it is seen not to be working, it will have to be changed. The amendment will give the Minister a way out, and he will need it. The legislation will prove to have been a folly and an embarrassment to the occupant of his office possibly at the end of one year, let alone three.
For all those reasons, I support the new clause.

Mr. Peter Bruinvels: I have considered this matter carefully. As you know, Mr. Deputy Speaker, I have attended all these debates in Committee. I have always been troubled by personation, because it has occurred in Leicester, East.
Like my hon. Friend the Member for Epping Forest (Sir J. Biggs-Davison), I am tempted by the new clause. It proposes rather a short life for the legislation, but it is still long enough for hon. Members to study the results of the local government elections coming up in May, the results of any Stormont elections and, as the right hon. Member for South Down (Mr. Powell) pointed out, the results, possibly, of a general election. We could all then get round a table and decide whether the legislation had cut out personation. My opinion is that it will cut out personation at a stroke. I appreciate that some hon. Members, especially those representing the Official Unionist party, have said that they see many people being denied the right to vote. That remains to be seen. It has been recommended

that the official poll card should have set out upon it all the requirements, inculding documents that should be taken to the polling station. If electors adhered to the requirements, I am certain that the right people would come forward to vote. That could be assessed after three years had passed, and I think that that period would be a satisfactory one in which to determine whether the number of votes cast had declined. I hope that there is a decline in certain votes in Leicester, East but that does not include my own.
The electors need to know what is required when they go to the polling stations and thee should be one voting requirement. This is vital. The hon. Member for Mid-Ulster (Rev. William McCrea) talked about the single transferable vote, which, thank goodness, we do not have in the rest of the United Kingdom.
The best requirement is an identity card. The entire United Kingdom should have one form of identity card. That would cut out a great deal of personation. When three years have passed, I hope that those who represent constituencies in England, Scotland and Wales will be able to persuade the Government that the issuing of identity cards should be considered carefully. If they were issued, we could end personation, which is countrywide, at a stroke. Much of what we have learnt in discussing the Bill can be incorporated in the Representation of the People Bill, which will come before us on Monday. I regret that that Bill did not precede this one.

Mr. Stuart Bell: It is always a great pleasure to be able to take up the remarks of the hon. Member for Leicester, East (Mr. Bruinvels). As the hon. Member for Mid-Ulster (Rev. William McCrea) has said, it is a pity that more hon. Members are not in their places to listen to an interesting and deep debate on an extremely important subject. Its importance lies in the constitutional issues that are raised by the new clause. The constitutional implications will not have escaped the right hon. Member for South Down (Mr. Powell) or the Minister. Parliament is sovereign and no Parliament can bind its successor. Therefore, it is not necessary to have a three-year limitation clause in a measure of this nature. If the serious consequences which have been mentioned were to come about, Parliament could introduce new legislation. I am not entirely sure whether the comments of the right hon. Member for South Down reflected upon the competence of the Government, or that of a future Government, to alter this legislation, when enacted, if there were the consequences to which hon. Members have alluded.

Mr. J. Enoch Powell: Is it the Opposition's position that the Prevention of Terrorism (Temporary Provisions) Act 1976 should have been a permanent Act with no terminal date?

Mr. Bell: I anticipated that the right hon. Gentleman would mention that Act, which touches upon civil rights.

Mr. Powell: Does this Bill not do so?

Mr. Bell: The Bill touches on civil rights, but it cannot be equated with the Prevention of Terrorism (Temporary Provisions) Act 1976 or the Act, which will have to be reviewed shortly, on the use of the Diplock courts. The Prevention of Terrorism (Temporary Provisions) Act 1976 and the legislation that provides the Diplock courts relate to fundamental human rights, and while the Bill touches


on human rights I am not entirely sure that it does so to such an extent that a three-year limitation should be written into the Bill.
The Bill should stay as it is and should not be amended by the new clause. There will be district elections next May in Northern Ireland and eventually there will be a general election. I cannot anticipate that a general election will take place before three years have passed. Those two elections may involve too short a period to test fully the purposes behind the Bill and the reasons why identity must be established before one can vote in Northern Ireland.
The hon. Member for Londonderry, East (Mr. Ross) has demonstrated his knowledge of voting in Northern Ireland, and of election registers and how they are kept. He mentioned a point raised by the right hon. Member for Lagan Valley (Mr. Molyneaux) that the Sinn Fein vote, if one goes back to 1921, rises and falls within bands and that the vote at the last election was not unusual. He used that argument to show that the Bill might be ill-conceived and unnecessary. The Opposition take a different view. We believe that if we oppose personation we must support the Bill. That is why we do not support the new clause.
The right hon. Member for South Down reminded me of a short story by Anton Chekhov called "The Three Years" which end with the phrase:
In search of truth, a man makes two steps forward and one step back. Suffering mistakes and the weariness of life thrusts him back, but the search for truth drives him on and on".
We shall always seek the truth in this House, and in relation to the three years the Bill is better as it stands.

Rev. Ian Paisley: I am amazed that those who know nothing, practically, about elections in Northern Ireland, who have never stood at an election in Northern Ireland and who do not know the conditions of electioneering there, seem to know more about how elections should be organised than those who have practical experience.
The House should be interested in giving every possible legitimate voter the right to cast a vote. If democracy is to be maintained in the face of the vicious terrorist attacks by the IRA we must ensure that the people believe in the democratic system. There is only one way to exercise that democratic system — by the vote. I am amazed that some do not regard the right to vote as a basic human right. It is one of the most basic fundamentals of democracy. My right to vote as a legitimate voter should be safeguarded. But some put that right on a different level.
If the House were passing legislation tonight to do for the whole of the United Kingdom what it is doing for Northern Ireland, the Chamber would be packed. Hon. Members on all sides would say that we were trying to hinder or stop people from voting. They would say that we were denying the right of people to vote. But since we are legislating for Northern Ireland it does not matter and hon. Members are not concerned.
We have an assurance from the Minister that he will give the people time to operate the system. Shall we have the same restricted hours in Northern Ireland for our elections? Shall we have the time to lengthen the voting procedure?
It is amazing that the Minister thinks that the current regulations are operated in the polling booths. I understand that the presiding officer has the duty, according to the law, to ask for the name and address of the person who approaches the officials to get a voting slip. Anyone who

knows anything about electioneering in Northern Ireland knows that people come to vote with a polling card. That polling card is taken, and the name is looked up on the polling list and marked off. That is done hundreds and hundreds of times on polling day, and everyone knows that. I wonder how many hon. Members representing Northern Ireland were ever asked their name at a polling booth.

Mr. Deputy Speaker: Order. I hope that the hon. Member will address himself to the new clause we are discussing. The hon. Member is having another go at making a Second Reading speech.

Rev. Ian Paisley: With due respect, Mr. Deputy Speaker, that is amazing. We have had a wide debate, and I have listened with great care to other hon. Members make the points that I am now making. Is there, with respect, some restriction tonight preventing me from taking part in this debate while other hon. Members can make their speeches without any interjection from the Chair?

Mr. Deputy Speaker: Order. I invite the hon. Member, as I have invited a number of hon. Members who have taken part in this debate, to address himself to the new clause that is before us, which deals with the duration of this legislation. I am sure that the hon. Member will address himself to that subject.

Rev. Ian Paisley: I am seeking, Mr. Deputy Speaker, to build up a case for why the new clause should be accepted by the House. I am trying to point out to the House, as best I can, what happens in Northern Ireland elections. We shall have a complete change of procedure. Those who come to the polling booth will have to come armed with a particular document. I still do not understand what happens to that document in the polling booth. The Secretary of State has made many statements about what will happen. I do not know whether that document will be the decisive document, whether the presiding officer will still make his decision without reference to the document or whether the address of the document really matters. I do know that the whole voting procedure will be seriously delayed and that many legitimate voters who come to vote will be dismayed by the fact that obstacles will be set in their way.
It is no use hon. Members thinking that that will not happen. Do hon. Members really think that Northern Ireland voters are different from anyone else in the rest of the United Kingdom? When the Northern Ireland people come to the polling booth, they come to vote. After this Bill is passed in this House, receives approval in the other place and is given the Royal Assent, this legislation will be forgotten until election day. Then there will be the furore of questions: Do I have the documents? Where are they?
New clause 1 contains a reasonable proposal. We talk about the legislation applying immediately after it is passed. Why not say that in three years it should be completely reconsidered? We have been told that we are in uncharted waters. Surely, having floated over those waters, we will be better able to chart them properly. Various hon. Members proposed what the Minister said were good ideas. Those good ideas are now lost. Will


those proposals be written into the legislation at some future time? In three years, will we redraft the whole of this legislation?
The hon. Member for Foyle (Mr. Hume), who has just joined us—there were some remarks about why he was not present—proposed that, in future, instead of the head of the house signing the document for all in the house so that their names could be put on the register, everybody should sign his name and write his date of birth. That would be done in duplicate. The presiding officer would have a copy. A person would be asked, "What is your name? What is your date of birth?" and told to sign his name. The presiding officer would know then who that person was. But that would all be forgotten. People would not come back and do that.
No one has stood up in this House and said that he wants to see personation. We are all against it. Everyone in the House believes in the principle of the Bill, but we do not believe that the Bill will achieve the desired result. If I thought that the Bill would achieve it, I would not be taking part in the debate; I would be happy to let it go through. The Bill will do grave damage to legitimate voters wanting to vote in Northern Ireland. It is the hon. Members in this House and our council colleagues who will bear the burden and heat of the day when the election day comes.
We are asking the Government to meet us and agree that after three years the whole procedure will be redrafted, with the benefit of experience and added wisdom. Is that an unfair request to make? The majority of hon. Members from Northern Ireland are asking that tonight. It is reasonable and fair that the Minister and the Government should meet us on the matter.
What worries me is that the Government, by presenting the Bill in its present form, have apparently not made themselves acquainted with the practicalities of carrying out the law on polling day. I hope that the Minister will bring us good news tonight. I hope that he will tell us that the hours are to be lengthened, and that the Government will give us the same hours for the local elections in Northern Ireland as we have for elections to this House. I hope that he will say that there will be no curtailment of the hours, and that people may have adequate time.
There are many matters in the Bill that will not be helpful, and I ask the Government to agree to look at the legislation after three years. We have renewals in regard to many other important matters of 'law in Northern Ireland. Why can we not have a new Bill presented which will embody the proposals which have been made in this House? I plead with the Minister to meet the representations which have been made to him by the people on the ground who will have to work the legislation if it is passed by this House.

The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Nicholas Scott): I have listened very carefully to the arguments on the new clause. Having considered them, it is now my duty to explain why the Government do not feel able to accept the new clause.
In no sense can the Government be accused, as the hon. Member for Londonderry, East (Mr. Ross) suggested, of engaging in hasty or ill-considered legislation on this matter. As he knows, as the House knows, and as every constitutional party in Northern Ireland knows, these proposals have been under consideration since the beginning of 1982, there have been representations about
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them from the constitutional parties in Northern Ireland, and the Government very carefully considered the principles on which the legislation should be based before introducing it to the House.
Before turning to the three main reasons why I feel that the Government cannot accept the new clause, perhaps I may rebut the point, made by the right hon. Member for South Down (Mr. Powell), that this is in any sense an inexpensive, or a cheap, trial in Northern Ireland of something that is to be applied more widely in the United Kingdom in due course.
Northern Ireland is where the problem of personation exists. It exists in a very serious way, as was borne in on the Government by representations from all the constitutional parties there. During the progress of the Bill through the House I have said how much I regret the necessity for treating Northern Ireland differently from the rest of the United Kingdom, but that is where the problem exists and where action has to be taken to preserve the integrity of the electoral process.
The right hon. Gentleman gave as his reason for introducing the new clause that it would make it easier for the Secretary of State to make amendments if that proved necessary or desirable in the light of experience. It is clear from the approach of the right hon. Gentleman and others that they had substantial amendments in mind which would alter the basis of the legislation. I shall outline to the House three reasons why I should be very reluctant indeed to go down that road.
As a matter of principle, I do not believe that the House would or should agree to frame or enact legislation on the assumption that it may well fail to achieve its intended objective. When I spoke in earlier debates on the Bill about going into uncharted waters or unknown territory, I was talking about the effects of the Bill on polling station procedures as we have known them. I have, however, no doubt whatsoever about the effect of the Bill on personation. In my view, which has remained unchanged throughout the passage of the Bill, the combined effects of clauses 1 and 3 provide the most effective deterrent against widespread organised personation that it is possible to devise in the circumstances facing us and within the time scale that we have if we are to deal with this before the local government elections in May next year.

Mr. William Ross: Is the Minister implying that if the time scale were longer he would take a different view? If not, what is he implying?

Mr. Scott: I am not saying that at all. I am saying that if, in addition to the circumstances facing us, there was another constraint that the Government had to bear in mind it was the necessity to take action by May 1985.
I acknowledge, of course—I thought that this point was dealt with very well by the hon. Member for Middlesbrough (Mr. Bell) — that two of the most important pieces of legislation applying in Northern Ireland—the Northern Ireland Act, which provides for the system of direct rule, and the Northern Ireland (Emergency Provisions) Act—are temporary in nature, as indeed is the Prevention of Terrorism (Temporary Provisions) Act which applies throughout the kingdom. In all those cases, however, because of the exceptional nature of the legislation and the impact on human rights, Parliament decided that the legislation should be subject to regular renewal in the hope that the circumstances


which made it necessary would go away. But that is a very different matter from enshrining in statute, by implication, the sentiment that a particular measure is probably flawed in principle and that provision must therefore be made for improvement in subsequent legislation.
Thirdly, on a purely practical note, the aspect of the Bill which it has become clear from our discussions is most likely to require examination as it works out in practice is the list of prescribed documents. If, through experience and reflection, it appears that certain documents should be added to or substracted from the list, or if in due course it is decided to go for a single document, the Bill provides that that can be achieved by means of statutory instruments. Indeed, that was one of the ideas put forward by the right hon. Member for South Down in Committee.
I cannot accept, however, that the principles and purposes of the Bill are unsound or likely to be rendered obsolete within the kind of time scale envisaged by the new clause. I therefore recommend that the House reject the new clause.

Mr. James Molyneaux: The Minister took exception to the suggestion made by my hon. Friend the Member for Londonderry, East (Mr. Ross) that the Bill had been drafted in haste and that the Government had acted in haste and without consultation. He will know, however, that although consultations began early in 1982 they came to a sticky end long before the elections.
On the not inappropriate date of 12 July 1982 the former Secretary of State wrote to me:
I therefore intend to leave matters as they are at present".
And so they remained until the Gracious Speech announced that this Bill was to be bounced upon us. I am sure that the Minister did not intend to mislead the House, but it is clearly wrong to suggest that consultation had been continuous when, in fact, there was consultation for a few months and then nothing further until the Gracious Speech and the introduction of the Bill.

Mr. Scott: That is not true. Apart from having had representations from the Ulster Unionist party after the general election in 1983, it was made clear on other occasions that consultations were continuing. I answered a parliamentary question on the matter earlier this year and made it clear that the Government were still considering which measures they might take to counter personation, including the introduction of a Bill.

Mr. Molyneaux: I agree that ideas were exchanged occasionally. There was a further letter from the former Secretary of State on 10 March 1983, but it did not take us far because he proceeded to list mainly the objections and difficulties in proceeding as he originally intended. That does not mean consultation within my meaning of the term.

Rev. Ian Paisley: Does the right hon. Gentleman agree that consultations effectively stopped in 1982?

Mr. Molyneaux: That was the point that I attempted to make. Apart from the occasional mention of the problem, there was no consultation in the sense that ideas were put to parties or a consultative process was engaged in in a meaningful way in the interval.
The hon. Member for Middlesbrough (Mr. Bell) referred to other items of legislation with a terminal date,

and sought to show that they were different because they affected human rights. It is true that they affect the human rights of some people, but the Bill affects the basic human rights of all. Like the hon. Member for Antrim, North (Rev. Ian Paisley) I cannot accept that the right to vote unhindered is not one of the most basic human rights of all.
To be fair to the Government, they never concealed their doubts about the measure. The Minister has shown that he is aware of its difficulties and weaknesses. During previous debates he has made it clear that he is willing to reconsider and re-examine the legislation. It does not, therefore, seem unreasonable to hope even at this late hour —both chronologically and in our discussions—that the Minister will listen to our pleas and welcome the assistance that we are attempting to offer him by providing a way out in the new clause.
Three years is a reasonable period. It will take some time after the elections in May 1985 to evaluate the results and the voting patterns. That is important. If the Government feel that it could be done in a shorter period, we would offer no objections. Another time factor is involved with the drafting and processing of the Bill. It has emerged in previous debates that similar problems of vote-stealing have occurred in England. We have evidence that that has appeared fairly significantly in England. The Minister, and other Ministers, have said that they do not believe that because the Home Office does not know about it. Unless my calculations are far out, in the light of what many hon. Members who represent English constituencies have said, I shall be surprised if the Home Office is not made aware of those difficulties within the next three years.
Therefore, I would have thought that three years would be an appropriate period. That also raises the question of who urged the Northern Ireland Office to make haste and to take such speedy action in Northern Ireland. It is true that many Northern Ireland parties were aware of the vote-stealing activities of Sinn Fein, but we did not lose our heads over it. We had been through the problems before and managed to contain it.
One asks what were the sources of the pressure that forced or persuaded the Government into a Bill with such haste. Like the Government, those sources felt that they needed more time because they have not been enthusiastic in helping the rest of us make the Bill a little more workable.
We have listed the defects, and this is not the occasion to restate them. The Government admit that they are sailing in uncharted waters. We have put down numerous marker buoys to assist the Government and we trust that they will make use of those devices.
We hope that the Government and those who have to implement the legislation and try to make the mechanism work will, in due course, be able to report their conclusions to us. Even at this late stage we are offering the Government a way out. Like them, we shall be watching the working of all the devices.
I make the Minister a genuine and sincere offer—we are prepared to assist him in monitoring all this legislation for the next three years, and then to return and co-operate with him or his successor in framing a new Bill if that proves necessary. If the Minister maintains that he cannot concede and accept our amendment, I have no option but to urge all hon. Members to support the new clause one.

Question put, That the clause be read a Second time:—

The House divided: Ayes 12, Noes 124.

Division No. 40]
[11.51 pm


AYES


Beggs, Roy
Parry, Robert


Forsythe, Clifford (S Antrim)
Powell, Rt Hon J. E. (S Down)


McCrea, Rev William
Robinson, P. (Belfast E)


McCusker, Harold
Skinner, Dennis


Maginnis, Ken



Molyneaux, Rt Hon James
Tellers for the Ayes:


Nicholson, J.
Mr. William Ross and


Paisley, Rev Ian
Mr. A. Cecil Walker.




NOES


Amess, David
Lennox-Boyd, Hon Mark


Ancram, Michael
Lester, Jim


Atkinson, David (B'm'th E)
Lilley, Peter


Bell, Stuart
Lloyd, Peter, (Fareham)


Best, Keith
Lord, Michael


Bevan, David Gilroy
McCrindle, Robert


Boscawen, Hon Robert
Macfarlane, Neil


Brandon-Bravo, Martin
MacGregor, John


Brooke, Hon Peter
McKay, Allen (Penistone)


Brown, M. (Brigg &amp; Cl'thpes)
Mather, Carol


Buck, Sir Antony
Maude, Hon Francis


Carlisle, John (N Luton)
Mayhew, Sir Patrick


Carlisle, Kenneth (Lincoln)
Meadowcroft, Michael


Clarke, Rt Hon K. (Rushcliffe)
Mellor, David


Conway, Derek
Merchant, Piers


Cope, John
Meyer, Sir Anthony


Cranborne, Viscount
Miller, Hal (B'grove)


Currie, Mrs Edwina
Mills, Iain (Meriden)


Dorrell, Stephen
Moate, Roger


Douglas-Hamilton, Lord J.
Moynihan, Hon C.


Dover, Den
Murphy, Christopher


Durant, Tony
Newton, Tony


Fairbairn, Nicholas
Nicholls, Patrick


Fallon, Michael
Osborn, Sir John


Favell, Anthony
Page, Richard (Herts SW)


Forsyth, Michael (Stirling)
Patchett, Terry


Forth, Eric
Pawsey, James


Fox, Marcus
Percival, Rt Hon Sir Ian


Freeman, Roger
Powell, William (Corby)


Gale, Roger
Powley, John


Galley, Roy
Raffan, Keith


Garel-Jones, Tristan
Rhodes James, Robert


Gregory, Conal
Rhys Williams, Sir Brandon


Griffiths, Peter (Portsm'th N)
Rifkind, Malcolm


Ground, Patrick
Roe, Mrs Marion


Hamilton, Hon A. (Epsom)
Sackville, Hon Thomas


Hamilton, Neil (Tatton)
Sainsbury, Hon Timothy


Hanley, Jeremy
Sayeed, Jonathan


Hargreaves, Kenneth
Scott, Nicholas


Harvey, Robert
Shaw, Sir Michael (Scarb')


Hawksley, Warren
Smith, Tim (Beaconsfield)


Hayes, J.
Soames, Hon Nicholas


Heathcoat-Amory, David
Spencer, Derek


Hickmet, Richard
Stanbrook, Ivor


Hind, Kenneth
Stern, Michael


Holt, Richard
Stevens, Lewis (Nuneaton)


Howarth, Alan (Stratf'd-on-A)
Stevens, Martin (Fulham)


Howarth, Gerald (Cannock)
Taylor, John (Solihull)


Hume, John
Thompson, Donald (Calder V)


Hunt, John (Ravensbourne)
Thorne, Neil (Ilford S)


Hunter, Andrew
Thurnham, Peter


Jackson, Robert
Tracey, Richard


Jones, Gwilym (Cardiff N)
Twinn, Dr Ian


Jones, Robert (W Herts)
Walden, George


Kennedy, Charles
Wallace, James


Key, Robert
Waller, Gary


King, Roger (B'ham N'field)
Wardle, C. (Bexhill)


Knight, Gregory (Derby N)
Wheeler, John


Lang, Ian
Whitney, Raymond


Lawler, Geoffrey
Wilkinson, John


Leigh, Edward (Gainsbor'gh)
Wolfson, Mark





Wood, Timothy
Tellers for the Noes:


Yeo, Tim
Mr. John Major and



Mr. Michael Neubert.

Question accordingly negatived.

Clause 1

VOTERS TO PRODUCE PRESCRIBED DOCUMENTS

Mr. Scott: I beg to move amendment No. 1, in page 1, line 12, leave out 'prescribed' and insert 'specified'.

Mr. Deputy Speaker: With this, it will be convenient to take Government amendments Nos. 2 to 7.

Mr. Scott: In Committee on 28 November, I undertook, in reply to an amendment moved by the right hon. Member for South Down (Mr. Powell), to bring forward on Report a group of amendments to incorporate in the body of the Bill the spirit of the right hon. Gentleman's amendment, setting out the list of documents from which a voter will be required to produce one to obtain a ballot paper from a presiding officer or clerk.
The amendments seek to fulfil that undertaking, and I will explain why the Government believe that the list should consist of the documents set out in amendment No. 5.
We have looked closely at the reservations expressed in the House by a number of right hon. and hon. Members about the documents included in the list. I accept, as I must, the criticism of the right hon. Member for South Down that there is no document in the list which every person must by law have in his possession; there is no such document in the United Kingdom. I accept that each of the documents listed is not wholly satisfactory for the purpose of relating the person producing the document to the person described in the electoral register.
We have made it clear to the House from the outset that any list cannot be foolproof, but, bearing in mind the criteria that the documents should all be official documents issued by the Government or Government agencies, and that the list should not be drawn so tightly that any group of qualified electors is effectively disfranchised, or so widely that it would be simple for large numbers of documents to be obtained easily or be easily forged, I remain of the view that at least until we have the benefit of practical experience, the list of documents, specified in the amendment is right. If any difficulties subsequently arise in connection with any particular document, the new paragraph of rule 37 will permit the list to be varied as appropriate.
In Committee, the hon. Member for Upper Bann (Mr. McCusker) said that the medical card alone could suffice as the specified document, because it is the only document on the list to which every elector is entitled and which can be obtained free of charge. I considered that idea carefully, because it has some attractions, but the essence of the Government's approach is that there should be the option to produce one of a range of documents, to make it easier for legitimate electors to have one of the documents easily available for production to the clerk or presiding officer.
Furthermore, if only one document were specified the opportunity would be removed for a voter to produce and for the presiding officer to consider another specified document in those cases where the first document


produced a reasonable doubt in the mind of the presiding officer that the voter was the person on the electoral roll who he claimed to be.
The hon. Member for Antrim, North (Rev. Ian Paisley) has made a particular point about the inclusion of a certified copy or extract of an entry of marriage. In view of the concern that he has expressed I should explain why we have nevertheless decided to include it in the form now before the House.
The document has been included to provide for the case of a woman who has registered in her maiden name and who subsequently married and, as a result of her marriage, no longer possesses any of the other specified documents in her maiden name. The provision has been drafted so that it includes women who might marry at any time during the period of registration—July to mid-September—and so that it continues to apply until the latest possible date in the life of the register bearing the woman's maiden name. The hon. Member for Upper Bann raised that point. That date will be 15 February in the year two years on from the year of the compilation of the register. That is why th provision applies to women married within two years ending with the day of the poll concerned.
The amendment incorporates in the Bill an amendable list of specified documents as a result of an undertaking that I gave. We have sought to keep the balance between disfranchising genuine electors and yet inhibiting and deterring those who would corrupt the electoral process. We have listened carefully to the views and concerns expressed by right hon. and hon. Members and have taken them into account in drafting the amendment. I urge the House to accept it.

Mr. J. Enoch Powell: The Bill will certainly leave the House the better for the insertion in it of the crucial documents in proper terms instead of by a sidelong reference, as was the original form of the Bill, to documents that would be prescribed in regulations which the House had not yet seen. Certainly the necessity of throwing into proper legislative form the documents referred to in the notes on clauses which were available to hon. Members has resulted in a considerable tightening and improvement of the definitions.
I welcome the fact that the visitor's passport appears to have disappeared, having made a fleeting apparition in the notes on clauses. There is also undoubtedly an improvement, to which the Minister has just referred, in the opportunity for a married woman validly to produce as a specified document her marriage certificate. That reminds me that the description of the certificate is, at any rate, more comprehensive and accurate than it was in the form in which we were previously considering it.
However, two points in the clause as drawn may raise a query. Perhaps the Minister will be able to refer to them when he intervenes. Paragraph (a) deals with the driving licence. In the case of a Great Britain driving licence, the provisional licence appears to be excluded. Perhaps, by some other means, the provisional licence is excluded in the case of the Northern Ireland driving licence. But that does not appear on the face of the amendment. Will the Minister confirm that the provisional driving licence is also excluded, as it should be, in the case of the Northern Ireland driving licence?
I should be grateful too if the Minister will refer to the last words of his amendment:
varying any description of document".
That appears to be an ambiguous phrase. It might appear to mean varying the description given in this amendment of the identical document. That is, it would be the same document but differently described from the way in which it is described here. That seems a rather curious provision to make. One would have supposed that we would ensure that we had the definition right in inserting the documents in the Bill as we are doing now. On the other hand, if it means varying the description of documents that can be used for this purpose, that point is surely covered already by the words "adding or deleting documents". I hope that when the Minister replies he may be able to clear up those two minor points of explanation.
The Bill, however, is certainly more satisfactory for carrying upon the face of it, for those who will use it and interpret it, the documents that for the present are to be those the production of at least one of which is to be a condition of exercising the franchise in Northern Ireland.
I welcome the two concessions that the Government have made within the scope of the amendment. I hope that I may take the opportunity to refer to the patience with which the Minister has, throughout the proceedings on the Bill, listened to the arguments that have been put. Even if that patience sometimes appeared to be linked with obduracy, nevertheless it was a patience that the Committee and the House appreciated.

Mr. Scott: I should like to deal with the three points raised by the right hon. Member for South Down (Mr. Powell). First, contrary to what the right hon. Gentleman seemed to understand, the amendment includes a United Kingdom visitor's passport. Secondly, the right hon. Gentleman raised the question of the driving licence and the exclusion of the Northern Ireland provisional licence from the amendment. It is excluded because under article 12 of the Road Traffic (Northern Ireland) Order 1981 only full licences can be issued. The need to include a power to vary the description of documents is very much a longstop provision. It was included in case the law under which the document was issued were to be amended, in which case the description might have to be altered.

Amendment agreed to.

Amendments made: No. 2, in page 1, line 14, leave out 'prescribed' and insert 'specified'.

No. 3, in page 1, line 20, leave out 'prescribed' and insert 'specified'.

No. 4, in page 2, line 1, leave out 'prescribed' and insert 'specified'.—[Mr. Scott.]

Amendment proposed: No. 5, in page 2, line 5, at end insert —
(1DA) For the purposes of this rule a specified document is one which for the time being falls within the following list:—

(a) a current licence to drive a motor vehicle granted under Part III of the Road Traffic Act 1972 (excluding a provisional licence), or under Article 12 of the Road Traffic (Northern Ireland) Order 1981 or any corresponding enactment for the time being in force;
(b) a current passport issued by the Government of the United Kingdom or by the Government of the Republic of Ireland;
(c) a current book for the payment of allowances, benefits or pensions issued by the Department of Health and Social Services for Northern Ireland;
(d) a medical card issued by the Northern Ireland Central Services Agency for the Health and Social Services;


(e) a certified copy, or extract, of an entry of marriage issued by a Registrar General, where the voter producing the copy or extract is a woman married within the period of two years ending with the day of the poll concerned.

In sub-paragraph (e) above "a Registrar General" means the Registrar General for England and Wales, the Registrar General of Births, Deaths and Marriages for Scotland or the Registrar General for Northern Ireland.
(1DB) Regulations may make provision varying the list in paragraph (1DA) above (whether by adding or deleting documents or varying any description of document): .—[Mr. Scott.]

Question put, That the amendment be made:—

The House divided: Ayes 108, Noes 4.

Division No. 41]
[12.14 am


AYES


Amess, David
Macfarlane, Neil


Bell, Stuart
MacGregor, John


Best, Keith
Major, John


Boscawen, Hon Robert
Mather, Carol


Brandon-Bravo, Martin
Maude, Hon Francis


Brooke, Hon Peter
Mayhew, Sir Patrick


Brown, M. (Brigg &amp; Cl'thpes)
Meadowcroft, Michael


Buck, Sir Antony
Merchant, Piers


Carlisle, Kenneth (Lincoln)
Meyer, Sir Anthony


Clarke, Rt Hon K. (Rushcliffe)
Miller, Hal (B'grove)


Cope, John
Mills, Iain (Meriden)


Cranborne, Viscount
Moate, Roger


Currie, Mrs Edwina
Moynihan, Hon C.


Dorrell, Stephen
Murphy, Christopher


Douglas-Hamilton, Lord J.
Newton, Tony


Dover, Den
Nicholls, Patrick


Durant, Tony
Osborn, Sir John


Favell, Anthony
Page, Richard (Herts SW)


Forsyth, Michael (Stirling)
Pawsey, James


Forth, Eric
Percival, Rt Hon Sir Ian


Fox, Marcus
Powell, William (Corby)


Freeman, Roger
Powley, John


Gale, Roger
Raffan, Keith


Galley, Roy
Rhodes James, Robert


Garel-Jones, Tristan
Rhys Williams, Sir Brandon


Gregory, Conal
Rifkind, Malcolm


Griffiths, Peter (Portsm'th N)
Roe, Mrs Marion


Ground, Patrick
Sackville, Hon Thomas


Hamilton, Hon A. (Epsom)
Sayeed, Jonathan


Hamilton, Neil (Tatton)
Scott, Nicholas


Hanley, Jeremy
Shaw, Sir Michael (Scarb')


Hargreaves, Kenneth
Smith, Tim (Beaconsfield)


Harvey, Robert
Soames, Hon Nicholas


Hawksley, Warren
Spencer, Derek


Hayes, J.
Stanbrook, Ivor


Heathcoat-Amory, David
Stern, Michael


Hind, Kenneth
Stevens, Lewis (Nuneaton)


Holt, Richard
Stevens, Martin (Fulham)


Howarth, Alan (Stratf'd-on-A)
Taylor, John (Solihull)


Howarth, Gerald (Cannock)
Thompson, Donald (Calder V)


Hume, John
Tracey, Richard


Hunt, John (Ravensbourne)
Twinn, Dr Ian


Hunter, Andrew
Walden, George


Jackson, Robert
Waller, Gary


Jones, Gwilym (Cardiff N)
Wardle, C. (Bexhill)


Jones, Robert (W Herts)
Wheeler, John


King, Roger (B'ham N'field)
Whitney, Raymond


Knight, Gregory (Derby N)
Wilkinson, John


Lang, Ian
Wolfson, Mark


Lawler, Geoffrey
Wood, Timothy


Leigh, Edward (Gainsbor'gh)
Yeo, Tim


Lennox-Boyd, Hon Mark



Lester, Jim
Tellers for the Ayes:


Lloyd, Peter, (Fareham)
Mr. Tim Sainsbury and


Lord, Michael
Mr. Michael Neubert.


McCrindle, Robert





NOES


Paisley, Rev Ian



Parry, Robert
Tellers for the Noes:


Patchett, Terry
Mr. Peter Robinson and


Skinner. Dennis
Mr. William McCrea.

Question accordingly agreed to

Clause 3

OFFENCES RELATING TO PRESCRIBED DOCUMENTS

Amendments made: No. 6, in page 4, line 2 leave out
'document prescribed for the purposes of rules 37 to 40',
and insert
'specified document within the meaning of rule 37'.

No. 7, in page 4, line 6 leave out from 'a' to 'that' in line 8 and insert
'specified document within the meaning of that rule which either falsely bears the name of the person in possession or does not bear'.—[Mr. Scott.]

Mr. Scott: I beg to move, That the Bill be now read the Third time.
Over recent weeks, a considerable amount of parliamentary time has been devoted to this important Bill. I welcome that, because it seeks to deal with a significant problem in Northern Ireland. During our debates, the House and the Committee have been united in support of the aims that underline the Bill. I believe that it is widely accepted both in the House and in Northern Ireland that in recent years personation has become a substantially greater problem. The objective of the Bill and of the Government is to protect the right to vote by diminishing as far as possible the opportunities for personation at elections in Northern Ireland.
I do not think that there is any dispute about the desirability of that aim. Experience in recent elections—and I have the general election in June 1983 especially in mind—has demonstrated that the existing legislation is inadequate to deal with the scale of the problem as it now confronts us. That legislation was never designed to withstand the pressures to which it is now subjected.
One of the fundamental principles in our electoral system in the United Kingdom to which the Government attach considerable weight is that it should be as easy as possible for the legitimate elector to cast his vote. That principle is continued in the Bill. In the debates on the Bill, a number of hon. Members, particularly the hon. Members for Upper Bann (Mr. McCusker) and for Antrim, North (Rev. Ian Paisley), have drawn attention consistently to this important requirement. We want to encourage the legitimate voter and to discourage the vote stealer. The legitimate voter, no less that the democratic process as a whole, is entitled to protection from those bent on abuse.
A good deal of time in Committee was devoted to the presiding officers' discretion. I understand and listened carefully to the case for giving wide discretion and not making the production of documents mandatory. This is a matter of judgment, but, having considered it again, I am firmly of the view that it would be the wrong course. No system that we introduce will be perfect, but there is a much greater chance of uniformity of practice if presiding officers are given minimum discretion in this sensitive area. Although I accept that in many parts of Northern Ireland electoral abuse may not be a serious problem, I do not believe that the electorate as a whole could have confidence in a system which conferred wide discretion on presiding officers.
The House will not want me to go over the ground that we have just covered on Report about the list of the documents which may be produced to obtain a ballot


paper. But the House will wish to be reminded that the Government are determined to see the widest possible publicity given in the run-up to the elections in May next year to encourage electors to understand that they will have to produce one of these documents to be able to vote. The documents will, as I undertook at an earlier stage, be clearly listed on the poll card for these elections. I appeal to and urge the political parties to do all that they can to tell their supporters about the new arrangements.

Mr. William Ross: Will there be time between the issuing of poll cards and the election for an elector to get a medical card if he does not have one?

Mr. Scott: I cannot give that precise undertaking, but, once the publicity has started, it will be possible for anyone who needs a medical card to get it in good time for the May elections. I have to consider the date upon which it is proposed to issue the poll cards to establish whether it will be possible to do that within the time.
The political parties and the chief electoral officer and his staff jealously guard their independence, and rightly, at election time. But I hope that it will be possible, in coming up to these elections, for the Government, the chief electoral officer and the political parties all to work together to make this attempt to tackle personation in Northern Ireland as effective as possible.
At this stage, perhaps I might pay tribute to the chief electoral officer and his staff. We should not underestimate their difficult and testing job in Northern Ireland.
I draw attention to the importance of clause 3, which gives the police the powers that they need to apprehend those seeking to frustrate the key provisions of clause 1. We have sought to strike a balance between giving the police sufficient powers to be effective while keeping those powers in the sensitive and potentially controversial area of elections to the minimum.
As the House has noted, clauses 1 and 3 need to be read together. In my view, the whole is greater than the sum of the parts.
I am grateful for the constructive way in which the House and the Committee have tackled this difficult subject. I understand the concern that has been expressed by Northern Ireland Members and others as I understood the reasons which lay behind the amendments which we debated in Committee. I assure the right hon. Member for South Down (Mr. Powell) that in showing patience and listening carefully there was a genuine effort to determine whether the new ideas which came forward could be incorporated into the Bill to improve it. Ihope that by accepting one of his amendments and introducing a Government amendment on Report in response to that, we have demonstrated that the Government have had an open mind and have treated the arguments on their merits. Having listened to the arguments advanced in debate, the Government remain of the view that, given Northern Ireland circumstances, the approach taken in the Bill is right. Accordingly, I commend it to the House.

Mr. Molyneaux: I confirm what the Minister has said about common ground between us on the Bill's objectives and aims. From the earliest stage of the consultations in July 1982, we made plain our views on the issue when we

said to the former Secretary of State that our general approach was a wish to see electoral law preserved and enforced but with the minimum divergence of the law in Ulster from that in the rest of the United Kingdom. It would therefore be inaccurate to suggest that the Ulster Unionist party has at any time pressed for correction at all costs and at any price. In fairness, I do not think that the Minister has suggested that.
We agreed that the electoral law should be observed and enforced, and we stressed that there should be the minimum divergence of the law in Northern Ireland from that in the rest of the United Kingdom. Over the years we have been consistent in our demand both for uniformity in the making of laws and in their enforcement. For example, before the first elections for the European Assembly in 1979, we asserted that the method of voting should be the same throughout the United Kingdom. We were supported on that occasion by the then Conservative Opposition, who are now in government, when a Division took place. Unfortunately, they have slipped out of the undertaking to ensure uniformity of voting systems for the 1984 European Assembly elections.
I suspect that the Government—the Prime Minister has said that they are rock firm for the Union—do not have their heart in the Bill. However it is dressed up, it imposes a real handicap on Northern Ireland electors. The divergences and variations might be tolerable if the measures in the Bill as it stands were likely to achieve the purpose that the Government had in mind when they set out on this journey. In the view of my right hon. and hon. Friends and myself, they will not be effective. They will fail and they will tend to penalise, for the first time this century, those who wish to influence through the ballot box, and only through the ballot box, the attitudes and policies of Parliament and the Government who result from any general election or, in the next local government elections, influence the choice of the men and women who in councils are closer to the electors than any other tier of elected representatives.
In recent weeks we have sought to improve the Bill. I have on other occasions paid tribute to the Minister and the Department for his and its willingness to discuss further and more significant changes. We have agreed some improvements but, from the start, we realised that the defects were so fundamental that, short of returning to the drawing board or the drafting table, it would be impossible to produce a measure which could deal effectively with the problem of vote stealing in certain constituencies.
If there had been more time to consider what was proposed between the point at which the former Secretary of State appeared to give up the struggle and the sudden appearance of the Bill, we could together have produced a workable measure. I regret as much as the Minister the fact we were unable to reach a wider measure of agreement. However, I think that he will accept and understand that the points of difference between us are so great that it makes it impossible for us to do otherwise than oppose the Bill on Third Reading.

Mr. Bell: The Official Opposition accept that personation happens in Northern Ireland. That was conceded by all sides and it was right for the Government to introduce the legislation. It was also right to seek to balance the right to vote, but it is not always possible to please every party.
The Government sought to improve the Bill in Committee. They have listened carefully to the arguments. No Bill is perfect and perhaps this Bill will be reviewed, as suggested tonight. The Bill attempts to eliminate personation in Northern Ireland. It is a step forward. We shall see at the district elections in May whether it is effective. We shall support the Government on the Bill.

Mr. William Ross: On more than one occasion the Minister has talked about sailing uncharted waters. He appears to have forgotten that, although the waters are uncharted to him and his officials, they are not to those of us who live in Northern Ireland. If we have not charted the exact waters, we have charted the adjacent waters in detail for many years. We have a fair idea of what the final charts will show. For that reason, we have been unremitting in our opposition to the measure.
The hon. Member for Middlesbrough (Mr. Bell), who spoke so briefly for the Opposition, said that we cannot expect to please every party. The Bill may please the Conservatives and others in Great Britain, but who does it please in Northern Ireland—that part of the United Kingdom which alone is affected by the Bill? It does not please the Unionists; it does not please the DU party, and I do not know whether it pleases the SDLP. We have not heard sufficient from them to know. No comment has been made by Sinn Fein, which in itself tells a story. Its members do not care two hoots about legislation passed here. They will attempt to carry on in their own merry way.
It is one thing if legislation does not please everyone, but when it displeases all responsible political opinion in the area affected, that is another matter. Hon. Members should reflect upon that.
The Bill's real objective is to cut Sinn Fein down to size —its real size—and to ensure that it is always defeated by the SDLP. If that is the intention the Bill is rubbish. In a Catholic area SDLP almost always defeats Sinn Fein. It would be wise for hon. Members to remember that after the last general election a Sinn Fein candidate was returned to this House. About one-third of the votes cast for anti-partition parties went to Sinn Fein. Only by a split vote in West Belfast did a Sinn Fein member win.
The objective of driving down the Sinn Fein vote is unnecessary and it is unlikely to succeed, because the real Sinn Fein vote is larger than some of us, especially on this side of the Irish sea, wish to admit.
The real objective should be to expose and isolate the extremists in Northern Ireland and to show the true face of Sinn Fein by having effective legislation. That objective requires us to do two things—first, to show Sinn Fein in its true colours, and, once that happens, the second objective of showing the true size of Sinn Fein will follow naturally. We would be gravely in error if we thought that the mass of the Northern Ireland people believe that terrorism has anything to offer them. If we get Sinn Fein down to its true size and get it to show its true face so that it can no longer hide in the mass of the people, more people will turn against Sinn Fein.
The Government clearly wish to reveal the true size of Sinn Fein, but their aim will be thwarted so long as there is legislation such as this and so long as they continue to use two differing electoral systems in Northern Ireland and, above all, so long as they continue to use the proportional representation—STV system. That system

was brought into operation in Northern Ireland to help the so-called moderates such as the Alliance party, but the system helps not just one group but all groups to turn their minority vote into a quota. If that were not the case, Sinn Fein would not win elections, and the sooner the House and the Government face that reality, the better it will be. Once they face that reality, they will start to proceed down the road they should have taken long ago.
One can plainly see that this Chamber was not designed with fudged politics in mind. It is not designed with cross benches. It is designed to force people to make a decision —to face each other and argue out a case on the Floor of the House — whether angrily or calmly depends on the issue of the time or the time itself. This country's politics are built purely and simply on forcing people to decide on which side of the divide they stand.
I have seen many Northern Ireland politicians try to sit on the fence. Sometimes, when they sat down on that fence, they found that it was a great wide hedge. It was not long before the hedge was trampled down, and those politicians found that at its centre, there was a narrow, vicious strip of barbed wire. Usually, when one tries to sit in the middle, the people catch up with one. It is not pleasant whenever the electorate catches up with politicians.
Whenever we force people to make a real decision, we shall be moving in the right direction. We shall rot do that so long as we allow them to fudge the issue in Northern Ireland by using the STV system or, for that matter, any other proportional representation system of election. Under such system, all groups and sub-groups can find a party that represents their own narrow view. That is not, in the long run, a recipe for calm consideration of the aspects that divide us. It is a recipe for bedlam, as the more, extreme elements always try, and often succeed, to drive out the less extreme.
If the Government really want to resolve the problem of Sinn Fein and to defeat Sinn Fein, they should go for the simple majority system that brought us all to this House, because, in the long run, that system gives more stability and sense to the elected body than the proportional representation system can ever do. The extremists in Ulster upon which the Sinn Fein—

Mr. Deputy Speaker: Order. I remind the hon. Member that he must deal with what is in the Bill.

Mr. Ross: As before, Mr. Deputy Speaker, I have to point out that the Bill will be extended by order to be applied to proportional representation elections at two levels in Northern Ireland — at local level and at Assembly level. Therefore, what we say about proportional representation — [Interruption.] And, of course, to the European election. I was forgetting about that. I dislike the European election so much that I rarely give it any consideration. [Interruption.] I was not standing in that election, as the hon. Member for Antrim, North (Rev. Ian Paisley) knows.
The House should keep very clearly in mind that this Bill does not apply only to elections to this House; it applies to other elections in Northern Ireland. It should be noted that under the simple majority system, Sinn Fein and other extremist parties have invariably done badly in Northern Ireland.
There have been many references in the debate to the number of votes cast for Sinn Fein with figures ranging


from 70,000 to 120,000. If that is translated into the outcome in a PR election, whatever percentage that is of the total vote should be reflected more or less in the seats gained. The local government wards have an effect on that, as do the electoral areas. It was very interesting, whenever we went to the commissioner, at "the inquiry" into ward groupings in Magherafelt, to find that he had made it clear that, if he had known that he was to do the grouping of wards, he would have thought again. He said that the five-to-seven-wards rule in the electoral order in 1983 put him in a straitjacket. If the Minister was getting the same sort of advice on this Bill as he had in relation to the ward groupings—it probably came from the same quarter so he probably was—I can understand now why Sir Frank Harrison said what he did.
It does not take a substantial minority to get elected under PR; it takes one eighth of the electorate. We shall be back with this sort of legislation for wider areas of the United Kingdom if anything that has been said by English Members in the debate has any relevance to what is happening in this part of the United Kingdom. I view with very grave suspicion a turnout of 96 per cent. I have seen a turnout of 96 per cent. and 97 per cent. occasionally, but it should be realised that it does not happen very often. It can happen only in very favourable circumstances.
The circumstances are: good organisation, probably a small rural community, popular candidates, fear of the opposition, and a new electoral register. If any one of those items is missing, it is very difficult to get over 90 per cent., let alone 95 per cent. or 96 per cent.
It should be remembered that in March the register will be six months of age, because it is compiled with the date of 15 September in mind. At the end of its life it will be 18 months old. By that time at least 15 or 16 out of every 1,000 of the electorate will have died, and possibly over 20. That means that at an October election the register will be wildly out of date with very considerable variations from the original. It should be impossible to get 90 per cent. except under the most favourable conditions and the smallest populations.
The Government have fudged the issue, as they have fudged so many things in Northern Ireland. They are refusing to grasp the nettle and to provide proper means of identification and a proper system of election in Northen Ireland. Until they grasp the nettle and act upon it, we shall continue to have the sort of problem that we have been trying to deal with in the Bill, and which the Bill, despite the Minister's good hopes, will fail to meet.

Mr. Peter Robinson: I shall at once gain the support of the House when I say that I do not intend to speak at any length or to pad out my remarks.
The House is at least united on one thing — that personation is wrong, that it is cheating and stealing and that action must be taken. The House appears not to agree, however, on the best method of dealing with the problem.
In my view, the Government have shown a lack of resolve, first, in the fact that the Bill was introduced to assist the SDLP. Let there be no doubt about that. It was introduced to help the hon. Member for Foyle (Mr. Hume) and his party in the battle for the nationalist vote against Sinn Fein. The Minister should know that the best and perhaps the only way for the SDLP to ensure that it keeps

its nose ahead of Sinn Fein is properly to enter the democratic process and to take part in democratic politics in Northern Ireland. It will otherwise be seen as a faint, similar product to Sinn Fein and when that product is on sale in Northern Ireland the voters will go for the original product and the SDLP will be left on the shelf.
Instead of telling the hon. Member for Foyle to stand on his own two feet and take on Sinn Fein, the Minister decided that he would have to do something for him. The Bill is the product of that thought. If the Minister had thought further, he would have realised that the best and most effective action would have been to proscribe Sinn Fein, but he turns away from that and allows the front men for the IRA gunmen to entertain the democratic process and to abuse democracy in Northern Ireland. They are an integral part of the Provisional IRA movement and as much a part of that movement as any IRA commanding officer. Members who care to go to the Library will find a book entitled "Beating the Terrorists?"—

Mr. Deputy Speaker: Order. I must remind the hon. Gentleman and the House that the Bill is about preventing personation in elections in Northern Ireland. We must not have such a wide debate.

Rev. Ian Paisley: On a point of order, Mr. Deputy Speaker. The Minister has made it clear throughout the debates on the Bill that the aim of this measure is to deal with Sinn Fein. That is why the Bill was sponsored in the House. Surely in this final stage of the proceedings it is in order for an hon. Member to state his view of that proposition and to comment on what the Minister has said.

Mr. Deputy Speaker: We have had many debates—on Second Reading, on amendments, on new clauses, and so on. The Third Reading debate is concerned with what is in the Bill and my job is to preserve the proper proceedings of the House.

Mr. Robinson: I of course accept your ruling, Mr. Deputy Speaker. I merely point out that the purpose of the Bill is to make more difficult the task of those who would personate, and those whom the Minister recognises as most likely to do that are members of Sinn Fein, who are under the IRA command structure. The best way to achieve that aim is to proscribe them and to put them where they need to be—outside the democratic process —rather than allowing them to abuse it.
The second way in which the Minister showed his lack of resolve was in relation to the only real solution to the identification problem—purpose-made ID cards. He did not want to go down that road, because he thought that there might be an ulterior motive on the part of those proposing it. He told the House that some people might not want to go and have their ID cards prepared. Those people, of course, are the very people whom the Minister wishes to prevent from personating. But he prefers yet again to run away from the only effective way of dealing with the matter and to propose an unpalatable mish-mash of forms of identification which have little in common with one another and none of which has all the points required—photograph, name, address and, in our view, signature. The prescribed documents are thus a second-rate alternative.
The Minister again turns his back on the mayhem that will undoubtedly occur on 15 May and on subsequent election days when his plan is put into operation. He has


thought little about the danger in which he places presiding officers. Ordinary decent voters will bring them prescribed documents, but what will Sinn Fein bring to the ballot box?
In the past, presiding officers were aware that Sinn Fein members were personating, but were afraid to take the necessary action. It will be the same on 15 May when Sinn Fein members again demand other people's votes at the polling station. What will the presiding officer do? The Bill shows what he should do. It is easy for us to put into legislation what he should do, but he must live among those who are personating, and he and his family will be in danger.

Mr. John Hume: Does not the hon. Gentleman agree that the presiding officer must do that whether there is a list of identification documents or not?

Mr. Robinson: I am glad that the hon. Gentleman intervened to make my point. The Bill has little value if the presiding officer is in fear, as he was before. It does not do anything about that. If he denies people a vote, mayhem will result. I hope that the Minister will join me in my constituency on 15 May to see the reaction of those who are denied a vote.
The Bill makes it no harder for Sinn Fein members to personate. It makes the task of the presiding officers more difficult because the necessary administrative measures will cause delays before votes can be cast. It makes the party workers' task more difficult because they must convey the Bill's requirements to the electorate and probably run people to the polling station twice because they will forget the prescribed documents. It makes the voters' task more difficult, and will probably confuse him. The candidate will probably come off worst, not only because fewer votes will be cast in the face of the confusion that will arise, but because he will be blamed for this, not the Minister, who will not be at the polling station to see the results.
In conclusion, the Bill is a dog's breakfast. The Minister may have taken some of the ingredients out and put others in, but it is still a dog's breakfast.

Mr. James Nicholson: I rise for the first time to speak about the Bill, and so I am one of the few who can say that whatever I say, will not have been heard before. I was happy to leave the Bill in the hands of my right hon. and hon. Friends, but when I listened to the Minister I felt that I should intervene.
This is a poor and bad Bill. It will cause many and immense problems in the future, such as those outlined by the hon. Member for Belfast, East (Mr. Robinson). In parts of my constituency there has always been personation. Personation has always existed and will continue to exist, despite the Bill. Those who want votes will continue to get them by threats, intimidation or whatever means will achieve them. The Bill places presiding officers in a more difficult position than ever before.
I am worried about the parts of the Bill which relate to presiding officers. More than half of my constituency does not have the problem of personation, but it has been tarred with the same brush by the Minister.
The Minister has referred to Northern Ireland as a whole as being involved in personation, but only small

parts of constituencies—it is not every constituency—have that problem. I find that intolerable, unacceptable and most aggravating.
There are many thousands of electors who never have and never will abuse their right to vote. I am worried that there are some who will be disfranchised by the Government's action.
For many, the act of voting can be an ordeal. It is something they are not enthusiastic about. The documents that the Government are asking voters to produce will dissuade some from even going to the polling station. The Government may be doing harm by introducing the Bill. I hope that I may be proved wrong but I doubt it.
I have as much experience at grass roots level as any hon. Member. I have good grounds for believing that I have more experience than those involved in drawing up the Bill and bringing it to this stage.
I have sat in a polling station as a personation agent and I have acted as a sub-agent. I believe that the Bill will cause more problems for those involved in elections in Northern Ireland before polling day, on polling day and after polling day when people realise the effect of the Bill.
The Bill does not strike the right balance. The Government have panicked; the Bill is a panic measure and one that the Minister will live to regret.

Mr. J. Enoch Powell: I shall refer in a few sentences to what is in the Bill, because it contains two grave elements. First, it makes a fundamental alteration in the franchise by attaching a new condition—hitherto non existent—to the right to exercise the vote. Secondly, it changes the franchise in one part only of the United Kingdom thus introducing a differentiation between the right to vote for membership, for instance, of this House between one part of the United Kingdom and the remainder.
My hon. Friends and I, and, indeed, virtually all who represent constituencies in Northern Ireland, are bound to resist the measure because on both counts it fails to meet the requirements.
The new condition which is attached to voting is a condition which cannot, by its very nature—the debates on the Bill have shown this — achieve the intended object.
The documentation will be inadequate to ensure that personation does not occur, so that the purpose behind the innovation in the franchise will not be reached by the Bill.
The circumstances in Northern Ireland are not to that degree unique, nor is the consequence of those circumstances to the electoral outcome in Northern Ireland so grave as to justify the extreme gravity of the step of legislating differentially on this crucial matter of the franchise for Northern Ireland as against the rest of the United Kingdom.
Those who represent Northern Ireland seats would be failing in their duty if they did not oppose this measure at this last stage.

Rev. Ian Paisley: At this early hour of the morning I know that many hon. Members wish to get away, but the people of Northern Ireland and the candidates at local government elections, Assembly elections, elections to this House and EEC elections will have to live with the Bill. It is all very well for Members of this House to say that the Bill ought to be given a trial. We have said that


the Bill ought to be given a trial for three years and that after three years it ought to be looked at again. But we have been told that the Bill must become law. Reasonable propositions have been ruled out. Ministers have said to me that the purpose of the Bill is to deal with the IRA threat and that the SDLP want the Bill.

Mr. Hume: I hope that the Minister will confirm that the request for the Bill did not come from the SDLP. The first request came from the former Secretary of State. He wrote to all parties in Northern Ireland and asked them to come and discuss the problems relating to vote stealing in Northern Ireland. On that occasion the SDLP opposed the introduction of such a measure as this. After subsequent elections, it became clear that the evils were so widespread that we ought to acquiesce. I have put before the House the only proposal which I believe is foolproof against vote-stealing in Northern Ireland. It relates to the moment of registration of voting. I said on Second Reading that the proposal was not perfect, but it is the only one which is before us now.

Rev. Ian Paisley: I am very pleased that the House now knows that the SDLP do not want the Bill. I hope that the hon. Gentleman will express that view by the way he votes tonight.

Mr. Hume: That is not what I said. I shall acquiesce.

Rev. Ian Paisley: The hon. Gentleman says that he is going to acquiesce. Why acquiesce when the hon. Gentleman know that the Bill will not fulfil its task? In the past, this House has tried by legislation to prevent various aspects of Irish nationalism and republicanism and has failed utterly. Sinn Fein will not be defeated by the Bill, even when it becomes an Act. Anybody who believes that Sinn Fein will be defeated by the Bill ought to have his head examined. Everybody knows that those who intend to personate will steal as many votes as they can at the next election. If there is an increase in the Sinn Fein vote after the Bill becomes law, this House will be a laughing stock. Nobody will laugh more heartily at this House than Sinn Fein and the IRA. Therefore, the House needs to look very carefully at this legislation.
I am amazed by the Minister's explanation of the registrar's certificate. The registrar's certificate is copied from the certificate issued by the minister. His certificate is no good, but a copy will be accepted. I cannot understand why. Nor can any minister in Northern Ireland, whether he be priest or clergyman. I do not understand the Government's reasoning. The Government believe that their original proposals must be adhered to as though they were the laws of the Medes and the Persians. I am pleased that the Minister has accepted the proposal that the poll card should carry upon it a list of these documents. I am waiting to hear whether we shall have time during the elections in Northern Ireland to carry out the provisions contained in the Bill. I trust that we shall be told tonight that we shall have at least as much time at local elections as is provided on this side of the water.

Mr. Scott: The Order in Council that will extend the provisions of the Bill to local government elections will take account of the point that the hon. Gentleman and others have made about the length of polling hours. The draft order will be made available to the political parties for consultation before it is laid before Parliament.

Rev. Ian Paisley: I welcome that assurance, because it is essential that the people of Northern Ireland have time to produce the documents and time to cast their votes. The Minister's intervention encourages me. I know what happens on election day, and I know that time is needed. I agree that something should be done, and the proposition of the hon. Member for Foyle (Mr. Hume) was a good one, but it has been ruled out. The Bill includes a list of prescribed documents but does not include a document that would be produced by the presiding officer and confirmed by the voter. It is a pity that more thought was not given to the idea of the hon. Member for Foyle. The Minister told me that it would be impossible to have such a system in operation by May. That may be so, but why could we not introduce it after May?
It would be better for us not to rush through this legislation. That is why my hon. Friends and I will vote against it.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 105, Noes 13.

Division No. 42]
[1.11 am


AYES


Amess, David
Lilley, Peter


Atkinson, David (B'm'th E)
Lord, Michael


Best, Keith
McCrindle, Robert


Boscawen, Hon Robert
MacGregor, John


Brandon-Bravo, Martin
Major, John


Brooke, Hon Peter
Mather, Carol


Brown, M. (Brigg &amp; Cl'thpes)
Maude, Hon Francis


Buck, Sir Antony
Mayhew, Sir Patrick


Carlisle, Kenneth (Lincoln)
Meadowcroft, Michael


Conway, Derek
Merchant, Piers


Cope, John
Meyer, Sir Anthony


Cranborne, Viscount
Miller, Hal (B'grove)


Currie, Mrs Edwina
Mills, Iain (Meriden)


Dorrell, Stephen
Moate, Roger


Douglas-Hamilton, Lord J.
Moynihan, Hon C.


Dover, Den
Murphy, Christopher


Durant, Tony
Neubert, Michael


Favell, Anthony
Newton, Tony


Forsyth, Michael (Stirling)
Nicholls, Patrick


Forth, Eric
Norris, Steven


Fox, Marcus
Page, Richard (Herts SW)


Freeman, Roger
Percival, Rt Hon Sir Ian


Gale, Roger
Powell, William (Corby)


Galley, Roy
Powley, John


Garel-Jones, Tristan
Raffan, Keith


Gregory, Conal
Rhys Williams, Sir Brandon


Griffiths, Peter (Portsm'th N)
Rifkind, Malcolm


Ground, Patrick
Roe, Mrs Marion


Hamilton, Neil (Tatton)
Sackville, Hon Thomas


Hanley, Jeremy
Sainsbury, Hon Timothy


Hargreaves, Kenneth
Sayeed, Jonathan


Harvey, Robert
Scott, Nicholas


Hawksley, Warren
Shaw, Sir Michael (Scarb')


Hayes, J.
Smith, Tim (Beaconsfield)


Heathcoat-Amory, David
Soames, Hon Nicholas


Hind, Kenneth
Spencer, Derek


Holt, Richard
Stanbrook, Ivor


Howarth, Alan (Stratf'd-on-A)
Stern, Michael


Howarth, Gerald (Cannock)
Stevens, Lewis (Nuneaton)


Hume, John
Stevens, Martin (Fulham)


Hunt, John (Ravensbourne)
Taylor, John (Solihull)


Jackson, Robert
Thompson, Donald (Calder V)


Jones, Gwilym (Cardiff N)
Thurnham, Peter


Jones, Robert (W Herts)
Tracey, Richard


King, Roger (B'ham N'field)
Twinn, Dr Ian


Knight, Gregory (Derby N)
Walden, George


Lang, Ian
Waller, Gary


Lawler, Geoffrey
Wardle, C. (Bexhill)


Leigh, Edward (Gainsbor'gh)
Wheeler, John


Lennox-Boyd, Hon Mark
Whitney, Raymond


Lester, Jim
Wilkinson, John






Wolfson, Mark
Teller for the Ayes:


Wood, Timothy
Mr. Archie Hamilton and


Yeo, Tim
Mr. Peter Lloyd




NOES


Beggs, Roy
Patchett, Terry


Forsythe, Clifford (S Antrim)
Powell, Rt Hon J. E. (S Down)


McCrea, Rev William
Robinson, P. (Belfast E)


McCusker, Harold
Skinner, Dennis


Maginnis, Ken



Molyneaux, Rt Hon James
Tellers for the Noes:


Nicholson, J.
Mr. A. Cecil Walker and


Paisley, Rev Ian
Mr. William Ross.


Parry, Robert

Question accordingly agreed to.

Bill read the Third time, and passed.

Orders of the Day — PETITION

Human Embryos

Mr. John Powley: I have the honour to present a petition for the protection of the human embryo, signed by some 1,295 residents of my constituency. They state
Wherefore Your Petitoners Pray that the House of Commons will take immediate steps to enact legislation which forbids any procedure that involves purchase or sale of human embryos, the discarding of human embryos, their use as sources of transplant tissue or subjects for research or experiment (unless this is done solely for the benefit of the embryo concerned).
I support the petition, and beg leave to present it to the House.

To lie upon the Table.

Orders of the Day — Law of the Sea Convention

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Mather.]

Mr. Cyril D. Townsend: While I am delighted to have the opportunity to raise a matter of great and growing international importance, the House this morning has to face the reality that the Cabinet almost certainly decided yesterday that Britain should not sign the law of the sea convention. The convention has been open for signature for two years. The period comes to an end on Sunday. So far, some 143 Governments have signed out of a potential 162.
I believe that the decision that the Cabinet had to make was a major one, and that the Cabinet made the wrong decision. It was a negative, shoddy and shameful decision, and fell well below the level of events.
Britain's self-interest as a great seafaring country happily coincides with our international responsibilities and obligations. It is a matter of great international importance. Seventy per cent. of the surface of the globe is covered by the sea, and the international negotiations in which Britain proudly and rightly played a major role lasted for almost three decades.
On this matter of world importance, a Conservative Government have gone out of their way to divorce themselves from Commonwealth thinking — and have done so after the most recent Commonwealth Prime Ministers' Conference when a powerful and unambiguous statement was produced calling for support for the convention. In 1980, the Carter Administration in the United States said that they were willing to accept the principles of the treaty which were then agreed on. Britain, under the present Government of course, followed suit, as it was clearly felt to be in our best interests. The Reagan Administration, as soon as it came into power, demanded the right to reconsider the entire package. Enlightened opinion in that country is that the United States is making a mistake in not signing the treaty. Elliot Richardson, a most distinguished former United States ambassador to the Court of St. James, said a year ago:
The real importance of the Law of the Sea Convention cannot be found either in the sum of its parts or in its extraordinarily comprehensive whole. It lies rather in its demonstration of the capacity of 160 sovereign states to work out accommodations among vital competing interests. This is an achievement whose significance will loom even larger as the world increasingly finds itself forced to come to grips with its own inseparability".
The House knows the reason for Britain failing to sign the convention, having previously supported it under Governments of both parties over the years. It is that President Reagan and the mining interests in the United States do not wish us to do so. As a strong supporter of the Atlantic Alliance, I claim that that is absolutely the wrong way in which to proceed. The United States' interests are not entirely the same as ours. Our U-turn suggests a willingness to be pushed around by the bigger partner.
In an editorial two years ago, The Times said:
The Government's decision to go along with the United States and jettison the UN convention of the law of the sea is very much to be regretted".
The editorial ended thus:
Britain, as a maritime nation rightly anxious to retain her distant-water naval capability has a higher interest in the fate of


this convention than anything to do with polymetallic nodules on the ocean floor. Freedom of navigation, the limits of territorial rights, development of the continental shelf, the passage of international straits, oceanic pollution, the peaceful transit of warships—these are all matters about which uncertainty has arisen … They are matters which, when uncertain are likely to give rise to conflict. They are all matters that are amenable to resolution under a system of validated international law.
More recently, the Financial Times of 30 November advised:
In the end, there must be some stable international legal regime for exploiting the sea-bed beyond coastal waters, if those waters are to be exploited. Difficult though it may be in practice, the Law of the Sea Convention is better built upon than demolished or ignored".
I like to think that the Foreign and Commonwealth Office is in favour of this international measure in principle. For the Ministry of Defence, it has great importance, especially for the Royal Navy, and for dealing with creepy crawlies and submarines. For the Department of the Environment, it has much to say about pollution; and the Department of Trade and Industry must be only too conscious of the strong support of the convention from maritime interests.
Only one part of the whole—indeed, only one part out of 17—is disputed. That is the mining aspect. The advice that I have been given is that such deep-sea mining is highly unlikely before the beginning of the next century and many experts think that it will be uneconomic for the foreseeable future. The cost of setting up a deep-sea bed mining operation is usually put at $1 billion to $1·5 billion. No investor will be prepared to commit such sums unless he has assurance that he has exclusive and unrestricted access to the mine site. The only way in which such access can be obtained is through the treaty.
I am told that Shell and BP are both potential deep-sea mining companies, as well as major shipping companies. Both have said that while they are dissatisfied with the mining provisions, the overall interests in freedom of movement must take precedence, and both companies favour signature. How much more important, therefore, is it for the Government to support the convention? Other nations with deep sea mining potential have signed, such as the Soviet Union, Japan, France and Canada.
We learnt today that the European Community is to sign those parts of the convention that it can sign, and Britain has acquiesced in this move. This has put us into a ridiculous position. It would have been far better to have reaped the rewards of signing ourselves.
In the past, Ministers have talked of Britain's increasing international importance. For example, I recall the Government's success in settling the Rhodesia issue, which had been a sore for so long. Only last night, we debated the considerable achievement of the agreement with Hong Kong. Why, then, do Ministers allow such effective and worthwhile international work to be constantly undermined by short-sighted, and sometimes penny-pinching attitudes? I think of the Government's decisions on overseas students fees, overseas aid, the external services of the BBC, the British Council, information officers overseas, and Wilton park. All these weaken our standing in the international community.
Yesterday, with one blow, the Conservative Government upset the Royal Navy, the Commonwealth and the maritime interests that are vital to our island community in the developing world in which we trade.

Yesterday, they quickly took a decision that our party, our people and country, and many of our international friends will live to regret. Let wiser thoughts prevail. Let us work within the international community. Above all, for God's sake, let us have some vision.

Mr. Keith Best: My hon. Friend the Member for Bexleyheath (Mr. Townsend) has made a most valuable contribution, and I congratulate him on it.
In creating a constitution for the oceans, the convention was described by Ambassador Koh of Singapore as:
a monumental achievement of the international community, second only to the Charter of the United Nations.
It is a convention of supreme importance for those of us who believe that world peace can be achieved only by a greater global security through international law. The convention sets out a regime that governs 70 per cent. of the surface of the globe. At Montego bay in December 1982, 119 nations were able to sign it immediately. It is an international agreement of a magnitude unparalleled in the history of the world. Is the United Kingdom to have no part in this? Where is our international responsibility to greater order in the world? The Secretary-General of the United Nations described the convention as:
Like a breath of fresh air at a time of serious crisis in international co-operation and a decline in the use of international machinery for the solution of world problems.
I asked my right hon. and learned Friend the Foreign Secretary three questions in November this year. I asked:

"(1) if he will recommend that Her Majesty's Government should accede to the United Nations convention on the law of the sea before the deadline of 9 December.
(2) which aspects of the United Nations convention on the law of the sea are still unacceptable to Her Majesty's Government; what progress has been made in the last 12 months to resolve such difficulties; and what progress he expects to make in the future;
(3) if he will make a statement on the United Nations convention on the law of the sea. — [Official Report, 29 November 1984, Vol. 68, c. 591.]

I received an unsatisfactory answer—I say with respect to my hon. Friend the Minister — because it merely referred me to a reply given to my hon. Friend the Member for Bedford, North (Mr. Skeet). That reply stated merely:
We have as yet taken no final decision. We remain in touch with other European countries which have not signed the convention."— [Official Report, 9 November 1984, Vol. 67, c. 42.]
I think that my detailed questions merited a more comprehensive reply than was given.
A parliamentary question was asked and answered today, which told us, as my hon. Friend the Member for Bexleyheath said, that the European Community, whose competence on the convention is limited, will sign the convention, and the Government will not stand in its way. It is time that we took a lead. We should not be equivocal: we should be in the forefront of the EEC. Only the Federal Republic of Germany and Italy, as I understand it, have said that they will not sign. So, although we agree to the EC, of which we are a member, signing, we will not do so ourselves.
On 2 December 1982, questions were put to my hon. Friend, and he said that the Government would do their best to achieve a more satisfactory solution. I ask him to say what the Government have done positively in the last two years to fulfil that promise?
Let this Great Britain of our have the courage to lead and not just to follow. We are not, nor must we ever be perceived to be, the lap-dog of the United States, even


though she may be our closest friend and ally. Unlike the United States, we have not refused to sign the treaty totally but have said that there should be improvements and that we are prepared to work for further compromise. We must do so, and the initiative must come from us.
On 29 November, I asked my hon. Friend what benefits would be lost to the United Kingdom if we failed to register under the preparatory investment protection resolution of the United Nations convention on the law of the sea. I received the surprising and incomplete answer:
I am not aware of any United Kingdom entity with deep seabed mining interests which wishes to take advantage of the deep seabed regime presently proposed under the United Nations law of the sea convention."—[Official Report, 29 November 1984; Vol. 68, c. 591.]
Yet the reality as set out in the recent excellent pamphlet on the subject by David Ward is that
Britain's mining companies can enjoy special status as 'pioneer investors' only on condition that we sign the convention within the two-year signature period which expires on 9 December 1984. The privilege of virtual guaranteed access to future seabed mine sites offered under the PIP resolution was among the major concessions offered to the industrialised countries by the Group of 77 at the end of UNCLOS 3. Ironically, Britain stands to throw away the benefits gained from earlier negotiations simply because of reluctance to sign the convention, which in any case requires ratification by 60 states including Britain before it can be enforced on our mining companies.
Should Britain fail to sign, our mining companies will fall behind those consortia or state enterprise that have been able to register as 'pioneer investors'. Already four countries—France, India, Japan and the USSR—have registered, which clearly indicates their intention to carry out deep-sea mining under the regime established by the convention. In particular, the Soviet Union and India have agreed an understanding to avoid competition for mine sites prior to their application for registration as 'pioneer investors'.
We should be prepared to lead in Europe, in the Commonwealth and in the world. That is the aspiration of every hon. Member and every citizen. Especially of this Government, who have done so much to restore our international prestige and position, we have a right to demand it. The eyes of the world are on my hon. Friend when he responds to the debate. I hope that he is able to do so with sufficiency of purpose. Our country's influence is crucial and will determine the success or failure of the law of the sea.

Mr. Jonathan Sayeed: It is a great pleasure to support my hon. Friends the Members for Bexleyheath (Mr. Townsend) and for Ynys MÔn (Mr. Best). It is regrettable that the only hon. Members present are Conservatives. We keep hearing from the Opposition that the Labour party, the Liberals and the SDP are worried about this matter, but tonight they are absent. It is a great shame, because this is a national and an international issue.
I understand that the Government are saying that they do not intend to sign this treaty on the basis that they do not intend to ratify it and therefore they do not sign what they do not intend to ratify. I understand that point of view. I also understand and share the Government's considerable disquiet with part XI, dealing with deep-sea mining. It is substantially flawed, but it is my belief that in the main the convention produces such considerable benefits for us that if we sign without ratification we can engineer changes in the convention that will allow part XI to be amended so that it is acceptable to the nation.
The Government say that they will not sign that which they will not ratify. However, there have been occasions when they have signed but not ratified. I shall give three examples. In 1971, we signed the International Maritime Organisation convention on liability for the carriage of nuclear materials in ships at sea. We have not yet ratified it. In 1977, we signed the north-west European offshore civil liability convention. We have not yet ratified it. Again in 1977, we signed an important convention, the Geneva convention on the laws of war. We have not yet ratified it.
I suggest that we should take as an example the 1973 Marpol convention of the IMO. We ratified it only in 1980. We did so only after a protocol had been negotiated to amend the convention before it came into force, allowing us to accept some but not all of the annexes. That is a good precedent for us to follow. We can sign with honour the convention on the law of the sea. We do not need to ratify it until we have negotiated far more sensible arrangements on part XI. I urge my hon. Friend the Minister to consider that approach and, therefore, to urge on his right hon. and learned Friend that we sign the convention and work for a much fairer system in part XI. The convention will stop, or at least contain, maritime anarchy, and that is desperately important.

Mr. Jeremy Hanley: I am grateful to my hon. Friend the Member for Bexleyheath (Mr. Townsend) for affording me two minutes during his excellent Adjournment debate to make my contribution on my own behalf and on that of the the United Nations Association in my constituency. I support the wisdom and faith in his words and those of my hon. Friends the Members for Ynys Mon (Mr. Best) and for Bristol, East (Mr. Sayeed) in major respects.
We must, for the sake of British trade interests, settle and codify international maritime law, especially navigational rights. Secondly, we must settle now, well before commercial interests run riot in the next century, the deep-sea mining problem. We are storing up trouble for ourselves from the year 2000 onwards and we must have the foresight to deal with it. Thirdly, we must show confidence in the concepts of the Commonwealth, the European Community and, above all, the United Nations. There is no better way of doing that than by signing the convention on the law of the sea.
I believe that the opposite of co-operation is isolationism, that of foresight is narrowmindedness, and that of generosity is greed.

The Minister of State, Foreign and Commonwealth Office (Mr. Malcolm Ritkind): I very much agreed with my hon. Friend the Member for Bexleyheath (Mr. Townsend) when he spoke of the seriousness and importance of the subject. I can assure him and my hon. Friends the Members for Ynys MÔn (Mr. Best), for Bristol, East (Mr. Sayeed) and for Richmond and Barnes (Mr. Hanley) that the Government attach the same importance to it. I can confirm that the Government's view has not changed from the one expressed in 1982 and that we have taken the decision that Britain should not sign the United Nations law of the sea convention.
Although 9 December is the last date on which signatures can be attached to the convention, it remains


open for accession by states after that date. It would be open to the United Kingdom, or to other countries which have not signed, to become a party to the convention if in future it is improved in a way that we would find appropriate.
We have decided that, although we cannot sign the convention, we shall not object to the signature of the European Community being attached to it. The Community's competence is limited to fisheries, pollution, customs matters between landlocked states and commercial policy to a limited extent. There is nothing illogical in us not objecting to the Community's signature. The parts of the convention for which the Community is competent are parts to which we do not object. We should have been happy to sign the convention if it had dealt only with those issues.
I take exception to the idea that the United Kingdom is simply following United States policy without considering the British national interest. I urge my hon. Friends to reflect on that accusation, because it is unworthy. We have not followed the United States. We have insisted on participating in the preparatory commission and have shown our willingness in certain circumstances to accept the desirability of signing the convention, while the United States has taken a harsher position on most of the issues.
The suggestion that the countries which have refused to sign the convention are the lapdogs of the United States does not hold much water when one sees the list of countries which have refused to sign the convention. Over 30 countries, including those well-known followers of America such as Libya, Nicaragua and Albania, as well as many countries with varying political complexions, have refused to sign.
When about 14 years ago we entered the negotiations on this convention, the United Kingdom hoped for agreement on a comprehensive regime on marine matters which was generally acceptable to all nations. In the latter part of the conference it became clear that agreement could not be reached on the provisions related to deep sea-bed mining. Instead of being adopted by concensus, the text of the convention was put to a vote, in which the United Kingdom abstained.
Although much of the convention was recognised as valuable, the proposed regime for deep sea-bed mining was unacceptable to almost all the states which had the capacity to develop the industry. Although some countries involved in deep sea-bed mining might have signed the convention, all the western countries with an interest in the industry have made it clear that they do not intend to ratify the treaty unless substantial changes are made to it. Only ratification will introduce new rights or obligations.
We came to the position which I have described to the House on 2 December 1982. We were not prepared to sign the convention with the current mining regime.
My hon. Friend the Member for Ynys Môn asked what we have done in the last few years. We have tried to influence the improvement of the convention. We have faithfully followed that objective. We have participated to the extent that our being non-signatories made possible. We have put forward proposals and ideas and have fully participated in attempts to improve the convention. However, that has not produced the results for which we hoped.
We have a number of objections to the mining regime—the onerous financial and other terms governing the participation of commercial operators, the cost that would accrue to this Government of supporting the over-elaborate structure of the authority and the activities of its operating arm—the Enterprise.
I shall explain the costs. For example, the fixed administrative cost of ratification at 1983 prices, with the sea-bed mining provisions unaltered and in force, would for the United Kingdom be between £3·6 million and £8 million. Running administrative costs would be between £1·5 million and £1·8 million.
In addition, the estimated cost to the United Kingdom of financing the Enterprise on the present basis would be between £25 million and £40 million in interest-free loans, plus the same amount in debt guarantees. That is on the assumption that the United States is also participating in the convention and paying its 33 per cent. share of the total cost. Since we know that the United States has no intention of participating, we have to add about 33 per cent. to those figures. Very large sums are therefore involved for a profoundly unattractive regime.
A further objection is the undesirable regulatory powers of the authority, in relation to production limitations, for example. In addition, there is the mandatory transfer of technology which sets an unacceptable precident which cannot have attracted any of my hon. Friends.
Finally, it is proposed that there should be a review conference 15 years after commercial mining commences. That review conference could force through an even more unattractive deep sea-bed mining regime through the use of the majority vote by which countries that had no deep sea bed mining interest of their own could enforce their views on those that did and were paying for the whole operation.
Our delegation to the preparatory commission went to considerable lengths to put across our views and to open up possibilities for obtaining improvements, but only a few limited technical proposals met with any response. Accordingly, the balance of advantage had to be decided between the greater part of the convention which is acceptable, but much of which is codification of existing laws, and significant aspects which are unacceptable to us. Those parts of the convention which cause us difficulty raise such significant problems that it would not be in our interest to sign. Moreover, none of the benefits to us in the convention is certain or, indeed, will take effect until the convention comes into force. There may be 138 signatories to the convention, but only 14 countries have so far ratified, and the convention will enter into force only after 60 states have ratified or acceded. There is no legal status under the convention which has not yet entered into force.
Some people, including my hon. Friend the Member for Ynys MÔn, have suggested that, by not signing, the United Kingdom loses the possibility for our companies to operate as pioneer investors under the convention's final Act. However, the terms are unattractive, and no United Kingdom entity interested in sea bed mining has indicated to us a wish to take advantage of those provisions.
My hon. Friend the Member for Bristol, East has argued that we should sign the convention and show a commitment to it in the hope that the preparatory commission will listen to our concerns. As I have mentioned to the House, it is not our practice in the United Kingdom to sign international treaties that we do not think


we will be able to ratify. We are not in a position to undertake to ratify the United Nations law of the sea convention. Even those who favour signature would regard ratification of the present convention as against our interests.
My hon. Friend the Member for Bristol, East mentioned various examples which he described as precedents—there is no such thing. The examples he cited are not cases where we signed a convention or a treaty in the declared knowledge that we did not intend to ratify them. In some cases there have been reasons that delayed ratification. The original signature may have been rendered inappropriate in the light of the new, changed circumstances. There is no precedent for the United Kingdom to sign a convention that it already knows it cannot ratify. That is an important consideration.
I must emphasise the fact that all the major European Community countries and other countries such as Japan which have signed the convention have made it clear that they will not ratify the convention. It may be acceptable to them to sign treaties that they do not intend ratifying, but that is not a principle that has carried weight in the United Kingdom. I should be surprised if my hon. Friends were suggesting that we should go back on a basic principle of our approach to international treaties, simply because it might have a beneficial political effect on our international relations.

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned accordingly at seven minutes to Two o'clock.